At a time of high tension in the credit market, problems at a sugarcane mill turned on the yellow light in the Fiagros and FIIs market.
Funds from the management companies Vinci and Vectis bought shares of a CRI of R$ 35 million issued by the Serpasa plant in April last year to finance a greenfield project in the São Francisco Valley, in Bahia.
A BTG FII, BTAL11, bought 100% of the shares of another CRI, worth BRL 60 million, issued in March 2021, to finance the same project.
The implementation of the plant was delayed, due to the delay in the release of operating licenses by the ANP. The initial forecast was that the plant would start operating in the first half of 2022 and already start generating cash. But the authorization was only published in the Official Gazette in January of this year.
In order not to be in default with the CRI payments of R$ 40 million, the Paranhos Ferreira family, owner of Serpasa, put their hand in their pocket: they sold a property to replenish the reserve fund. Thus, payments were made in full.
In addition, the family is in negotiations to dispose of a farm and honor the first installment of the amortization of the paper, which expires in July.
Finally, at the creditors’ request, the company hired Alvarez & Marsal to assist the company in the operational and financial management process, with the aim of optimizing production capacity, reviewing costs and making the plant’s expansion plan viable.
In the case of the R$60 million CRI, fully taken over by the BTG fund, interest payments were partially resumed following the sale of the family property.
“In March, the company carried out the sale of a non-strategic asset with a view to strengthening its capital structure, and resumed, albeit not in full, the payment of monthly interest”, informs the last report of the fund.
The CRI represents around 10% of BTAL11’s equity, which is down 6% this year.
The da Vinci funds contributed BRL 5 million each – which represents less than 3% of VCRI11’s net worth and less than 1.5% of VICA11. At Vectis, the VCRA11 allocated R$9.8 million (2% of equity) and the VCJR11, another R$5 million (0.3% of equity).
Funds are down for the year. VCRI11 has the biggest drop at 11%. VCRA11 and VCJR11 are down around 3%, while VICA11 is down 0.5%.
“We are calm regarding the situation. The structure of the operation was designed to protect the capital of investors and we have as collateral the owners’ farms and another one next to the plant itself,” said Múcio Mattos, partner and head of credit at Vectis.
According to Vectis, the operation has guarantees and fiduciary alienation of assets that represent, at market value, a ratio of 250% over the value of the operation, “which offers important protection in case of foreclosure of guarantees”.
For Mattos, the project remains interesting, as it will produce ethanol in a deficit region in fuel production. It is estimated that Serpasa alone will meet 15% of Bahia’s ethanol demand.
According to Vinci, the interest fund was structured to be used during the construction period of the plant while the company had no cash generation, which is normal in greenfield projects. Resorting to reserves was something that was on the radar.
Serpasa is a sugarcane mill in the Agroindustrial and Bioenergetic Pole of the Middle São Francisco. The industry will initially be supplied by 2,000 hectares of sugarcane. The goal is to reach 10,000 irrigated hectares, harvesting 2 million tons of sugarcane per year by 2030.
The Fiagros market has grown exponentially since these funds were regulated in 2021. Today there are 28 listed funds, with nearly 240,000 investors and a combined equity of BRL 7.5 billion.
Alexandre Ignacio
