Energy-trading firm Mercuria Energy Group is close to acquiring a refinery and hundreds of gas stations in Argentina being sold by Raizen SA, according to people familiar with the matter.<\/p>\n
A deal could be worth more than US$1 billion, some of the people said, asking not to be named because negotiations are private. Bloomberg<\/em> reported in November that Mercuria was among the finalists in the bidding for the assets.<\/p>\n No contract is signed yet and a transaction might not happen. Active negotiations are still ongoing, the people said.\u00a0<\/p>\n Raizen, Brazil\u2019s largest producer of ethanol fuel from sugarcane, is divesting assets amid concerns about its mounting debt. The company\u2019s credit rating was cut deeply into junk by Fitch Ratings and S&P Global Ratings, which cited a growing cash crunch, fueling a sell-off in its bonds that\u2019s cut the prices nearly in half over the past week.<\/p>\n Mercuria is looking to build its presence in the refining industry amid expectations that President Javier Milei will accelerate his deregulation efforts. In the first half of his tenure, Milei eliminated controls on crude and fuel prices.\u00a0<\/p>\n Raizen\u2019s Dock Sud oil refinery in Buenos Aires has a daily capacity of 101,000 barrels, making it the third-biggest facility in Argentina, according to the US Energy Information Administration.<\/p>\n Raizen\u2019s network of about 700 gas stations accounts for 19 percent\u00a0of the country\u2019s gasoline and diesel sales, according to market leader YPF SA.<\/p>\n Representatives for Mercuria and Raizen declined to comment.\u00a0<\/p>\n Mercuria has oil assets in Argentina through its majority stake in Phoenix Global Resources, which is drilling in a shale patch in Patagonia.\u00a0<\/p>\n Mercuria bidding for Raizen\u2019s assets is the latest example of commodity-trading houses looking to snap up oil facilities to maintain profits from the energy crisis that followed Russia\u2019s invasion of Ukraine.<\/p>\n Raizen, a joint venture of Shell Plc and Brazilian conglomerate Cosan SA, acquired the assets in 2018 from Shell, which owned them outright, during Argentina\u2019s last experiment with market-led reforms.<\/p>\n More recently, Raizen has been rattled by high debt after making big investments in waste-based biofuel plants that haven\u2019t paid off because of softer-than-expected demand.<\/p>\n by Cristiane Lucchesi, Lucia Kassai & Rachel Gamarski, Bloomberg<\/p>\n \t\t\t\t\t\t\t\t<\/p>\n