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Brazil's Rumo plans $829 million share offer to cut debt

Brazil's Rumo plans $829 million share offer to cut debt
From Reuters - September 22, 2017

SAO PAULO, Sept 22 (Reuters) - Rumo SA plans to sell as much as 2.63 billion reais ($829 million) in new shares as the Brazilian transportation and logistics company aims to reduce a heavy debt burden.

The board of Rumo approved the sale of 220 million new common shares in a restricted-efforts offering, according to a Friday securities filing. Affiliate Cosan Logstica SA also approved a capital increase of 750 million reais that their parent company, Cosan Ltd, will fully fund.

The decision to raise money from investors comes as analysts expect Rumos third-quarter results to be the strongest ever, but speculation of an offering led the companys shares to lag behind Brazils main stock index over the past month. Rumo expects to price the offering on Oct. 4.

About 4.4 billion reais of Rumos debt will be due through the end of the decade, on top of a planned 4 billion reais in planned investments in that time. The company hired Banco Bradesco SA, Morgan Stanley & Co, Banco Santander Brasil SA and Banco do Brasil SA to manage the offering, the filing said.

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