Brazil's Fibria sells 210,000 hectares of land to Parkia Participacoes for 1.65B reais
November 18, 2013
– Fibria Celulose SA has agreed to sell 210 thousand hectares of land in Brazil to Parkia Participacões SA for 1.65 billion reais (about US$729 million at current rates).
The company signed a binding agreement on Nov. 15 to sell the property, located in the states of São Paulo, Mato Grosso do Sul, Bahia and Espírito Santo, according to a statement on Fibria’s website dated Nov. 18.
The initial payment of 1.4 billion reais is to be paid by Dec. 30. After the closing date, Fibria will jointly manage its forests in partnership with Parkia Participacões for up to 24 years. An additional 250 million reais could be received in three installments over a period of 21 years, to be paid in the 7th, 14th and 21st years from the closing date, conditional upon land appreciation during the period.
Fibria is hoping the land sale will improve its credit and aid in the company’s growth, according to its statement.
At the closing date, Fibria will concurrently enter into forestry partnership agreements with Parkia Participacões for a period of up to 24 years, during which Fibria will continue to manage the forests on the acquired land.
As reported earlier this year, Fibria was looking for investors who would agree to leasing back the land on a long-term basis, to ensure eucalyptus trees are available for the company’s four mills in Brazil, according to a Bloomberg article on May 24 that quoted Fibria’s CFO Guilherme Cavalcanti.
The world’s leader in the production of eucalyptus pulp, Fibria has an annual production capacity of 5.25 million tonnes, and has a total forest base covering 958,000 hectares, of which 336,000 hectares are native forests that have been set aside for environmental conservation, Fibria’s website states.
The primary sources of this article are a statement dated Nov. 18 on Fibria’s website and Industry Intelligence archives.