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ECB Group acquires Petrobras Biocombustível stake in BSBIOS

Petrobras Biocombustível S.A. (PBIO), a wholly-owned subsidiary of Brazil's oil and gas major Petróleo Brasileiro S.A. (Petrobras) has announced the sale of its 50 percent equity interest in BSBIOS Indústria e Comércio de Biodiesel Sul Brasil to its partner in the company, R.P. Biocombustíveis, which owns the other 50 percent of BSBIOS and is controlled by the ECB Group.

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Petrobras Biocombustível S.A. (PBIO), a wholly-owned subsidiary of Petróleo Brasileiro S.A. (Petrobras) has announced the sale of its 50% equity interest in BSBIOS Indústria e Comércio de Biodiesel Sul Brasil to its partner in the company, R.P. Biocombustíveis, which owns the other 50% and is controlled by the ECB Group (photo courtesy ECB Group).

The decision is in line with Petrobras’ previously announced strategy of repositioning its portfolio. PBIO and R.P Biocombustíveis were partners since 2009 in the company, which today is a leader in the production of biofuels in Brazil.

According to a statement, as a whole BSBIOS was valued at BRL 1.235 billion (≈ US$231 million) on the base date of November 30, 2020. With deductions from net debt and other price adjustments, the net amount to be received by PBio is about BRL 322 million (≈ US$62.4 million). The transaction is awaiting approval by the Administrative Council for Economic Defense (Cade).

This moment represents the realization of another stage of a dream. I am pleased to have had Petrobras Biocombustível as a partner, with whom we overcame challenges and had victories. It was a period of a good relationship and mutual respect, I am grateful to the entire PBIO / Petrobras team that was together in this story and I am happy that the conclusion was made with the achievement of profitability for the partner. Now we will continue to grow, as we are sure that the fuel of the future is green, commented Erasmo Carlos Battistella, Founder and CEO of ECB Group.

Battistella highlights that the dream of creating a large renewable energy company was born 15 years ago and has always focused on innovation, the development of new technologies, and the primary desire to build a sustainable future for the next generations.

Our commitment is to build a legacy through biofuels, through the development of a cleaner and sustainable economy. I would like to give a special thanks to the entire BSBIOS team that made it possible to build this incredible story. We also have the strong support of four business partners, who helped us to become the market leader. Now we are going to stay strong, over coming the new stages of this business journey, Erasmo Carlos Battistella said adding that a new strategic planning for BSBIOS will be released once the deal is approved at Cade.

Successful partnership

According to ECB Group, R.P. Biocombustíveis and Petrobras formed a successful partnership that lasted 11 years and gave rise to a leading company in the biodiesel market in Brazil. The good relationship was driven by a governance model governed by a shareholders’ agreement, with an active board of directors for making strategic decisions with several good management practices were adopted with a view to controlling operations and continuously improving processes.

Erasmo Carlos Battistella, Founder and CEO of ECB Group that has a controlling interest in BSBIOS (photo courtesy ECB Group).

Founded in 2005 with the purpose of producing biodiesel, installing a modern industry strategically located in Passo Fundo (RS), close to the production of animal fats and soybeans, its main sources of raw material. The partnership with Petrobras Biocombustível started with the investment in the Marialva unit, in northern Paraná, in 2009.

In July 2011, the companies entered into a partnership, with equal participation, for the production of biodiesel in the municipality of Passo Fundo. BSBIOS has since become the largest producer of biodiesel in Brazil, according to data published by the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

It was the first Brazilian company to export biodiesel for commercial purposes, maintaining relations with 32 countries generating 471 direct and 80 indirect jobs.

Capacity investment

In 2019, the company invested BRL 69 million (≈ US$12.9 million), of which BRL 56.5 million (≈ US$105 million) in equipment and approximately BRL 12.5 million in infrastructure improvement. Another BRL 6 million (≈ US$112 200) was invested in innovation and energy efficiency actions.

As a result, the annual biodiesel production capacity in Passo Fundo and Marialva was expanded to 414 million liters of biodiesel per plant.

The ECB Group was assisted in this acquisition process by a set of long-standing partners with recognized technical capacity. Banco Itaú BBA acted as a financial advisor, together with GRT Partners as co-advisor while Banco Itaú and Banco do Brasil provided structured finance. Legal advice, auditing, and assistance were provided by Veirano Law Firm in Porto Alegre.

I can only be grateful for the excellent work done by the team that advised me. They were all fantastic. I would like to thank Banco Itaú and Banco do Brasil, who in this operation reaffirm their commitment to the biofuels sector in Brazil, ended said Erasmo Carlos Battistella.

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