Narrative
Full Description
Project narrative
On February 22, 2021, Bracell SP Celulose LTDA and Bracell SP Cellulose Trading FZCO — two special purpose vehicles and wholly-owned subsidiaries of Bracell — signed a $980 million syndicated loan agreement with a group of banks for Project Star. The members of the lending syndicate include Banco Bradesco BBI. S.A., Itau Unibanco S.A., Banco do Brasil S.A. and Bank of China Limited, Macau Branch. The loan was provided in two tranches: (A) for 680 million dollars and (B) for 380 million dollars. The loan was secured by (i.e. collateralized against) installments of fiduciary lien, property fiduciary lien, inventory pledge, equipment fiduciary lien and credit right fiduciary lien. The proceeds of the loan were to be used by the borrowers to finance the Star Project, for the expansion of the BSP pulp mill in the city of Lençois Paulista, in the state of São Paulo, which will allow it to increase production from 250,000 tons per year to 1.5 million tons. Project Star, upon completion, is expected to be the largest foreign direct investment in the State of São Paulo in the last 20 years. The project was official launched in April 2019. In September 2021, Bracell commissioned the first of its two new fiber lines at the Lençóis Paulista pulp mill (Project Star) in Brazil’s São Paulo state. The first batch of pulp was produced on September 9, 2021. Bracell did not comment on the start-up of the second fiber line at that time. The new pulp mill was formally launched on November 5, 2021.
Staff comments
1. The exact size of Bank of China’s contribution is unknown. For the time being, AidData assumes that all 4 members of the lending syndicate contributed equally ($245 million) to the $980 million loan. 2. Bracell is the world’s largest producer of dissolving pulp and specialty cellulose, whose operations are supported by the sustainable cultivation of eucalyptus and state-of-the-art factories. Founded in 2003, Bracell is a global leader in the production of special soluble cellulose from the eucalyptus it grows. The company, which operates in the states of Bahia and São Paulo with a workforce of 7,000 people, has an installed capacity of 750,000 tons of pulp per year.