November 14, 2018 / 8:19 PM / a month ago

Brazilian sugar mills owned by India's Shree Renuka up for auction

SAO PAULO, Nov 14 (Reuters) - Two sugar mills in Brazil owned by India’s Shree Renuka Sugars Ltd, which filed for bankruptcy protection three years ago, will be put up for sale in a judicial auction on Dec. 18, according to court documents seen by Reuters on Wednesday.

U.S.-based fund Castlelake is among the interested parties in the auction, two sources following Renuka’s court case told Reuters. Brazil’s Grupo Teston, which makes equipment for the sugar industry, is also a potential bidder, the sources said.

Castlelake and Teston had no immediate comment.

Shree Renuka was unable to service a debt near 4 billion reais ($1.06 billion).

It owns four mills in Brazil. The plants to be sold are the Revati mill in the municipality of Brejo Alegre, Sao Paulo state, and the Vale do Ivaí mill, based in Sao Pedro do Ivaí, Paraná state.

The company entered Brazil in 2010 when many foreign companies bought assets in the sector lured by a promising market for ethanol that never materialized. In subsequent years, a long period of low ethanol and sugar prices led to closures and dozens of bankruptcies.

It is not the first time Brazil’s justice system has tried to sell assets from the Indian company to pay back some of the creditors. Three previous auctions failed.

$1 = 3.7801 reais Reporting by José Roberto Gomes and Marcelo Teixeira; editing by Grant McCool

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