Monday, February 8, 2010

George Soros' Possible Adecoagro IPO

George Soros Adecoagro IPO

Adecoagro is a venture capital company formed in 2002 by a group of investors including billionaire George Soros. The company invests in assets like renewable energy and agriculture in Latin America.

If the time seems right, rather than just raising capital from its private shareholders, the company is thinking of going the initial public offering (IPO) route as the means to raise more capital.

With sugar and ethanol continuing to be an important and profitable part of Brazil, the company has a strong reason and base product to make it an attractive IPO candidate.

The company already has plans in place to increase its sugar-cane crushing to 11 million metric tons in 2016, a major increase from the current 4.8 million they are crushing now. Another strategy is to build a huge can processor in Mato Grosso do Sul sometime in 2010. The acquisition of a sugar mill in Brazil is another possibility during the year.

At this time Adecoagro either leases or owns close to 840,000 acres of farmland in Brazil, Argentina and Uruguay. They grow a number of agricultural products, including soybeans, rice and coffee on the acreage, while also producing a variety of dairy products too.

With land in Brazil skyrocketing because of increasing commodity prices and the value of the local currency, Adecoagro has worked on securing long-term land leasing agreements to lock in prices in order to manage costs.

It's not a surety concerning the IPO, as the company can also raise significant funds with its current base of investors in the company.

George Soros Adecoagro IPO

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