(Image: Cosan/Disclosure)
A Cosan (CSAN3), seeking to reduce its leverage, is considering selling a portion of its 4.1% stake in Vale (ELECTION 3), which are currently worth US$2.2 billion (R$12 billion), according to information from Bloomberg.
Still according to sources heard by the agency, the Raízen (RAIZ4) is also considering selling its gasoline distribution asset in Argentina.
This Friday (27), shares of RAIZ4 closed with an increase of 3.61% and those of CSAN3 with an increase of 1.47%. Vale, in turn, fell 0.45%.
Cosan is not experiencing its best moment on the stock market. During the year, the company's shares have already plummeted 31.37%.
Money Times contacted the company's advisors, who said they had no additional comments on the topic.
Analysts downgrade Cosan
In the view of BTG Pactualthe shares became more difficult to negotiate for two reasons: increasing complexity and group leverage.
One of the main factors that contributed to this worsening was, precisely, the purchase of 4.9% share in the mining company in 2022, something that the market never swallowed.
According to the Activate Investmentsthe selling movement could create some overhang (presence of an event that could affect the relationship between supply and pressure on the stock) on VALE3, since Cosan's position in Vale today is around 4%.
Analysts also remember that:
- Cosan has already disposed of a portion of its stake recently for liability management purposes;
- the company was unable to participate as it initially wanted in the company's decisions;
- the achievement of the movement's financial objective, so far, appears to be very questionable;
- the operation blocked other possible destinations for the holding's capital allocation, such as reducing leverage or increasing the payment of earnings.
For Vale, according to analysts, the movement, if confirmed, will in no way change the understanding of the company's shares.
How did Vale (VALE3) hinder Cosan? BofA cuts price target, but still sees stock soar 50%
O Bank of America also reduced its target price for Cosan shares from R$23 to R$20, citing Vale.
Despite the cut, analysts continue to see the company as a solid holding long-term and highlights initiatives to:
- streamline operations of underlying assets,
- reduce exposure to Vale by undoing the collar structure;
- improve interest coverage and unlock the value of subsidiaries.
According to the bank, the 16% discount for the sum of the parts represents support for the valuation.
“Over the last 15 years, Cosan has become a unique portfolio company in Brazil, with irreplaceable energy and infrastructure assets. Between 2009 and Sep/2022, the strategy rewarded shareholders with an average annual return of 18% vs. the Ibovespa +8%”, say Isabella Simonato and Julia Zaniolo.