May 16 (Bloomberg) -- Suzano Papel & Celulose SA slumped to the lowest in almost nine years after Brazil’s second-largest pulp producer said it plans to sell new shares to reduce debt and reinforce cash.
Suzano fell 1.9 percent to 6.36 reais in Sao Paulo, the lowest close since July 2003. Brazil’s benchmark Bovespa stock index slipped 0.6 percent.
The company plans to sell as many as 247.9 million voting and non-voting new shares and raise about 1.62 billion reais ($809 million), Salvador, Brazil-based Suzano said in a preliminary prospectus late yesterday.
Suzano will use proceeds to pay some debt and reinforce its cash position after debt climbed to a seven-year high in the first quarter. Net debt rose to 4.8 times earnings before interest, taxes, depreciation and amortization, or Ebitda, the highest since the first quarter of 2005, according to the latest available information on the company’s website.
The pulpmaker also received a bank loan of 2 billion reais from Banco BTG Pactual SA, according to a separate filing yesterday. Banco BTG is the financial adviser on the share sale.
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