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Cosan chairman: No plans to part ways with Shell on Raízen venture

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Screen Shot 2015-11-20 at 08.55.47By Marcelo Teixeira:Thu Nov 26, 2015 6:47pm GMT

SAO PAULO Nov 26 (Reuters) – Brazilian energy and transportation group Cosan SA Industria e Comercio has no plans to part ways with Royal Dutch Shell on their Raízen joint venture, the world’s largest cane processor, Cosan Chairman Rubens Ometto said on Thursday.

Asked by Reuters to comment on a local newspaper report that Shell, the oil major, would exercise a contractual option to buy out Cosan’s stake in Raízen, Ometto said the story was completely unfounded.

Brazilian financial publication Valor Econômico reported earlier this week that some changes in the managing group at Raízen have been made in recent days in preparation for Shell to take full control of the 50-50 joint venture formed in 2011.

Raízen put together Cosan’s sugar and ethanol operations and Shell’s fuels distribution business in Brazil.

“We have a fantastic partnership with Shell. We are very happy, Shell is happy, nothing is going to change in the current structure,” said Ometto, who has engineered a flurry of acquisitions in the last decade in sugar, biofuels, gas distribution and transportation.

Besides the 50 percent share in Raízen, Cosan controls Companhia de Gas de Sao Paulo Comgas, Brazil’s largest natural gas distributor, and Rumo Logística Operadora Multimodal SA, one of the largest rail companies in Latin America.

According to Ometto, Cosan and Shell are working on changes to their original contract to modify the buyout clauses.

“The contractual option that would allow Shell to have 100 percent of Raízen is being undone,” he said.

“When you marry with someone you need to have a way out. That was foreseen in the original contract. But now we already know each other, we are getting along well together, so these protection clauses are no longer necessary”, Ometto said.

Shell declined to comment on the matter.

Ometto said management changes at Raízen are normal and will continue when necessary, but they are not related to eventual ownership issues.

Raízen’s chief operating officer, Pedro Mizutani, left that job recently. Ometto said Mizutani will take a more strategic position in the company, due to his extensive knowledge of the Brazilian sugar and ethanol business.

(Editing by Jeffrey Benkoe)

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