November 7, 2018 / 9:11 PM / 8 months ago

UPDATE 1-Brazil sugar-ethanol firm Biosev open to possible sale of mills -CEO

(Adds comments from CEO)

SAO PAULO, Nov 7 (Reuters) - Biosev, the Brazilian sugar and ethanol unit controlled by commodities trader Louis Dreyfus, is open to market opportunities including the potential sale of additional mills, Chief Executive Officer Juan José Blanchard said on Wednesday.

The company sold a mill in September and hired financial advisers to evaluate additional asset sales, as it seeks to reduce a large debt.

“We are working carefully, evaluating the potential of each asset. It does not mean that our objective is simply to sell plants,” Blanchard, who became CEO in July, replacing Rui Chammas, told Reuters.

“Of course, as part of this careful evaluation, we are open to market opportunities, strategic partnerships or sale of one or another asset,” he said in an interview following the release of quarterly results.

Biosev posted a net loss of 155.6 million reais ($41.53 million) in the quarter ended in September, compared to a profit of 32.8 million reais a year earlier.

Louis Dreyfus injected $1 billion in the unit earlier this year to improve its capital structure. Biosev also renegotiated most of its 6 billion reais in debt, gaining more time to start repayments now scheduled to 2021.

Despite poor results recently for the unit, Blanchard sees an improving market outlook for both sugar and ethanol, which he said have the potential to boost the company’s cash generation.

“In the global sugar market, there is an expectation for a new cycle of supply deficits in the next two years,” he said, adding that a fall in production in other regions should increase the value of Brazilian sugar production.

Blanchard also said a new federal program to boost biofuels, called RenovaBio, should increase demand for cane-based ethanol in Brazil from 2020.

$1 = 3.7322 reais Reporting by Marcelo Teixeira; Editing by David Gregorio and Leslie Adler

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