Friday, October 25, 2013

Klabin capitalization process recovery for new factory in Ortigueira (PR)

One of the innovations in relation to the previous format is the possibility of placement of debentures convertible into mandatoriamente shares of Klabin S.A., with participation of the Group of strategic investors. "Shortly after announcing the proposal of operation [of offer of units in June], the financial markets have weakened," said the economic value of the company's General Director, Fabio Schvartsman. "Now, they have strengthened and we are comfortable to carry forward the process."
The Executive reiterated that the pulp of Klabin project differs from the others, since it is the only one that involves the production of long fiber. "The quality of Klabin's forests, this is perhaps the most competitive in the world, with cost box [production] unbeatable," he added.
Values
Klabin intends to raise $ 1.7 billion through capitalization and, considered the statutory deadlines, it is possible that the decision on the format of the operation is taken at the end of November. And the industrial investment foreseen in the new pulp mill was revised from $ 5.3 billion to $ 5.8 billion, as a result of the exchange rate. Initially, the project was estimated at $ 6.8 billion, is also considering r $ 1.5 billion for 107 thousand hectares of forests contributed by Klabin in the venture.
The company also provides for disbursement of $ 600 million in infrastructure works and $ 800 million in taxes levied on the industrial design, that are recoverable. In this way, without considering the value of the forests, the total investment in the new pulp mill will be of R $ 7.2 billion.
As part of the funding of the project, Klabin has a $ 4 billion line framed in Banco Nacional de Desenvolvimento Econômico e Social (BNDES) and another $ 300 million with the Inter-American Development Bank (IDB).
Actions
In response to this decision, yesterday (22) Klabin's shares retreated and was among the main Ibovespa falls. Around 12:15, Klabin's action fell to 1.65 percent, to 11.90 reals, before positive variation of 0.9 percent of the Ibovespa. At the same time, other actions in the paper and pulp sector progressed: Fibria earned 3.88 percent and Suzano climbed 1.68 percent.
According to analysts of XP Investimentos, the news is marginally negative for Klabin's actions. "We believe that such a project executed alone must commit the cash flow of the company for an extended period and it represents a risk to the company," stated in bulletin.
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