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Enron Mail |
Our internal intelligence group informed us that the following rumor is cir= culating in the Brazilian market: JBP is considering putting the Cenibra a= ssets (note that these are the assets they recently purchased from CVRD) up= for sale. They indicated that JBP was interested in improving the assets = (they are currently implementing a debottlenecking project at Cenibra) and = then selling them for cash flow reasons. The strongest possible buyer at t= his point would be VCP as they're currently in a very strong financial posi= tion (low leverage and are part of the Votorantim conglomerate which throws= off considerable cash from its cement and financial services businessnes).= Also look for the Scandinavians to possibly make a bid for the assets as = they've expressed interest in obtaining eucalyptus assets in the past. We = can most likely discount Aracruz from the running as they're currently rumo= red to be an acquisition target themselves (most likely buyer would again b= e VCP as they recently purchased Mondi's stake in the company and presently= holds a 28% share in Aracruz --- however, it's doubtful that VCP would be = able to swallow Cenibra and Aracruz simultaneously). What does this mean f= or the market? Any purchase by VCP would make them the strongest eucalyptu= s pulp producer globally with over 2 million tons (estimated market pulp wo= uld be about 1.7 million tons) and give them considerable pricing power as = they would represent roughly 30% of global market capacity for eucalyptus p= ulp. Please note that this is a rumor at this point and should be viewed as such= . I'll keep you updated regarding any developments. KC
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