Brazil’s development bank pouring cash into market, may be funding acquisitions of distressed international ethanol, biodiesel assets

In Brazil, lawyers observing the $58 billion in planned investments by the Brazilian state development bank are saying that the government is attempting to provide enough liquidity in the market to force consolidation in key industries including the ethanol industry.

An observer at the Thompson & Knight firm in New York warned that the ultimate goal of creating large-scale conglomerates would be a balance sheet strong enough to undertake overseas acquisitions that would take advantage of depressed prices for companies in general and renewable fuel companies in particular.

In the US, ethanol plants have been selling for 30 cents on the dollar or less due to ethanol overcapacity and the absence of liquidity in the US market.

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