Brazilian wood pulp processor Eldorado Brasil Celulose SA may resume the search for a strategic partner once parent company J&F Investimentos SA completes the negotiation of a leniency deal in a massive corruption investigation, Valor Econômico said on Monday.

Eldorado's aim would be to find a partner to inject up to $1 billion into the company as it seeks to expand its Três Lagoas pulp mill, budgeted at a total cost of 10 billion reais ($3.07 billion), Valor reported, without citing its sources.

In an interview with the paper, Chief Executive Officer José Grubisich did not comment on the plans specifically. He said J&F intends to grow its wood pulp business, but did not provide details.

Eldorado's priority is to roll over about 1.5 billion reais of trade credit lines to keep its finances in order until the end of the year, Valor said, citing Grubisich.

"Eldorado has never been in as good a moment in terms of cash flows and operations," it quoted him as saying. "We don't have solvency or liquidity problems."

Company press representatives were not immediately available to comment on the Valor report.

Eldorado sought a waiver from creditors who are owed 6.7 billion reais, Valor said, adding that talks with creditors were concluded last March.

On May 15, Eldorado said it would miss a deadline to submit audited first-quarter results.

According to Valor, Eldorado plans to release audited first-quarter figures by May 31 to avoid the risk of early maturing of debt if financial statements are not released by then.

J&F, the parent of Eldorado as well as meatpacker JBS SA , is in talks for a leniency agreement after its founders and main executives admitted to bribing lawmakers and politicians in a corruption scandal that threatens to topple President Michel Temer.

Brazilian federal prosecutors on Sunday made a new offer to J&F in which it would pay a 10.99 billion real ($3.37 billion) fine for its role in the corruption scandals. There is no official agreement yet.

Eldorado is also at the center of the Operation Greenfield probe into allegations of bribery and fraud at state-controlled pension funds.

 

Source: reuters.com

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