02/01/2024 – 20:43
The National Institute of Colonization and Agrarian Reform (Incra) sent letters to the Commercial Board of the State of São Paulo (Jucesp) and the Securities and Exchange Commission (CVM) to prevent the sale of the Eldorado Brasil Celulose to the Paper Excellence. This arises from an administrative procedure by Incra, which determined that Paper Excellence should have obtained prior authorization from the National Congress to formalize the Eldorado acquisition contract in 2017.
According to Incra, the contract represents the acquisition of a company with ownership and leasing of rural properties by a foreign company, requiring prior authorization. The conclusion is based on the analysis of Brazilian laws on the purchase and lease of land by foreigners.
As the contract will have to be terminated, J&F will have to return the resources to Paper Excellence, as Incra issued notifications to Jucesp and CVM with the aim of vetoing the deal. Faced with the nullity of the contract, Incra opened up in its administrative process the possibility of a negotiated solution between J&F and Paper Excellence, advising on the possibility of the companies voluntarily undoing the deal.
In a note to the market, Eldorado commented on Incra's letter, stating that the necessary measures include “the cancellation of the acquisition” and “if there is interest on both sides in a new transaction, request INCRA and other competent bodies for prior authorization for the business”.
An opinion from the Attorney General's Office (AGU), issued in August, reinforces that carrying out the transaction in violation of the law would result in the nullity of the acquisition of the properties.
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