Investment Update

RNS Number : 5765I

Clean Energy Brazil PLC

20 November 2008

 



20 November 2008

CLEAN ENERGY BRAZIL PLC

('CEB' or the 'Company')

Update on USACIGA

Clean Energy Brazil plc, an investment company focused on Brazil's sugar cane/ethanol industry, announces an investment update for its Usaciga asset, ahead of the publication of its midyear financial results. 

Usaciga continues to receive the assistance of Alvarez & Marsal in relation to the management of its debt and securing new sources of funds. Debt levels in US$ have remained relatively stable over the last three months at approximately US$115 million (of which approximately US$60 million is short term and US$55 million is long term), although in local currency during the same period, the 35% strengthening of the dollar has greatly contributed to the 21% increase of the total debt to approximately R$236million. As previously announced, the capital expenditure incurred by Usaciga in the Rio Parana greenfield site has resulted in a significant working capital shortfall and suppliers are now owed approximately R$36 million (US$17 million). Without debt restructuring and/or further funding becoming available in the short term, Usaciga will not be able to meet its current obligations to creditors.

During the current crop season, from 1 May until the end of October, the operation crushed a total of 1.4 million tonnes of cane. This resulted in an output of 105,000 tonnes of sugar and 46,000 m3 of ethanol. Unaudited sales during the period were approximately US$45.7 million. Non cash foreign exchange losses of US$15.5 million have contributed to a net loss on an unaudited basis of approximately US$21.4 million (this contrasts with 2007/08 when Usaciga achieved a profit through its hedging policy).

Usaciga also continues to pursue funding for the development of its Rio Parana greenfield.

Currently, CEB's cash balance stands at approximately US$28 million (of which US$6.7million is held in escrow and may in due course be payable to Usaciga pursuant to the December 2006 investment agreement between CEB, Usaciga and the Barea family).

Further enquiries:

Clean Energy Brazil plc Marcelo Junqueira (Chief Executive Officer)	Tel: [phone]
Smith & Williamson Corporate Finance Limited (Nominated Adviser) Azhic Basirov David Jones	Tel: [phone]
Numis Securities Limited (Broker) Charles Farquhar Lee Aston	Tel: [phone]
Fishburn Hedges (Financial PR Adviser) Andy Berry Dan Bradley	Tel: [phone] [e-mail] [phone] [phone]

 

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