SINGAPORE - Indofood Agri Resources' joint venture, Companhia Mineira de Acucar e Alcool Participacoes (CMAA), has entered into an arrangement with JFLIM Participacoes S/A (JFLIM), where JFLIM will transfer its fully owned subsidiary, Vale do Pontal Acucar e Alcool Ltda (UVP), to CMAA.

CMAA is a 50:50 joint venture between Indofood Agri and Apia SP Participacoes SA, while JFLIM is a 50:50 joint venture between JF Family and Rio Grande Investment, a member of the Salim group. The Salim group is a controlling shareholder of Indofood Agri with a deemed interest of about 74.49 per cent.

UVP, which is in Brazil, cultivates and processes sugar cane to make and market ethanol and sugar. It has a factory in Minas Gerais with cane crushing capacity of 2.5 million tonnes per year.

For the transfer of UVP, CMAA will issue new shares to JFLIM based on an agreed valuation of about 75.9 million Brazilian real ($26.6 million), following which JFLIM will have a 30 per cent stake in CMAA. Indofood Agri and JF Family will both retain a 35 per cent stake each in CMAA. JF Family will maintain its 50 per cent interest - direct and indirect via JFLIM - in CMAA, whereas Rio Grande will own an effective 15 per cent interest in CMAA.

Indofood said: "The acquisition will enable CMAA to expand its footprint in the sugar and ethanol industry in Brazil with a total annual cane crushing capacity increasing from 5.8 million tonnes to 8.3 million tonnes after the acquisition. All three mills are located in the state of Minas Gerais, and in close proximity to each other, forming a strong cluster enabling operating and management synergies."