UPDATE1-Shree Renuka acquires Brazilian firm for $82 mln

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MUMBAI Nov 11 (Reuters) - India's biggest sugar refiner Shree Renuka Sugars Ltd (SRES.BO) said on Wednesday it has acquired Brazilian sugar and ethanol producer Vale Do Ivai S.A. Acucar E Alcool for $82 million.

"It was a distressed asset," Narendra Murkumbi, chief executive officer, Shree Renuka, told television news channel CNBC-TV18, adding it has managed to restructure the firm's loans at low interest rates.

The acquisition includes two sugar and ethanol production facilities with a cane crushing capacity of 3.1 million tonnes per annum, with an enterprise value of $240 million, Shree Renuka told the stock exchange.

"We don't visualise any money raising, either in debt or equity," to fund the acquisition, Murkumbi added.

The Brazilian firm sources 70 percent of its sugarcane requirement from its owned or operated plantations and adds significant refining capacity to Shree Renuka, and has synergies with the Indian refiner and marketer of sugar, he said.

"It is good for the company in long term for getting raw material security for refinery they put in Haldia and one which will be operational at Mundra next year," said an analyst with a domestic brokerage who declined to be named.

The acquisition provides it an entry opportunity in Brazil, the world's largest sugar producer and exporter, and will enhance its competitiveness in the global sugar business, Shree Renuka told the stock exchange.

Shree Renuka expects to gain operational control of the Brazilian firm from January and aims to increase its size in years to come, Murkumbi said.

"We will be looking basically to get most of its sugar production to our refinery in Haldia in 2010."

Murkumbi indicated that the company has grown inorganically and can go for further acquisitions in the future.

"We will continue to look at acquisitions which make sense."

Raw sugar prices SBH0 have almost doubled in 2009 on robust demand from India, which is likely to buy about 6 million tonnes in 2009/10 on a sharp drop in domestic output.

The company's shares have more than trippled in 2009 due to higher domestic sugar prices, which has jumped over 80 percent so far.

Shares of the company were trading 2.08 percent higher at 218.80 rupees in a firm Mumbai market.

(Reporting by Ketan Bondre and Rajendra Jadhav; Editing by Sunil Nair)