Nov. 18 (Bloomberg) -- Fibria Celulose SA, Brazil’s largest pulpmaker, jumped to a three-year high after announcing a 1.65 billion-real ($722 million) land sale that will help the company cut debt.
The shares climbed 1.3 percent to 29.45 reais at the close of trading in Sao Paulo, the highest since November 2010. The MSCI Brazil/Materials Index advanced 3.5 percent.
The company sold 210,000 hectares of land in the states of Sao Paulo, Mato Grosso do Sul, Bahia and Espirito Santo to Parkia Participacoes SA, according to an e-mailed statement yesterday.
“We are positive on this news,” Citigroup Inc. analyst Juan Tavarez wrote in a research note to clients. “It accelerates de-leveraging and the potential return to investment grade.”
Fibria, which has been trying to regain its investment grade status since 2009, lowered its ratio of net debt to earnings before interest, taxes, depreciation and amortization to 2.9 times in the third quarter from 4.2 times in the year-ago period, according to its earnings presentation.
The Sao Paulo-based company will receive an initial payment of 1.4 billion reais on the closing of the contract, which is expected by Dec. 30, and will use the sale proceeds to pay debt maturing from 2014, Chief Financial Officer Guilherme Cavalcanti said today on a conference call.
To contact the editor responsible for this story: David Papadopoulos at firstname.lastname@example.org