Sale of bankrupt Brazil soy crusher's assets under legal threat

By Ana Mano

SAO PAULO, May 30 (Reuters) - A legal dispute over control of bankrupt Brazilian soy processor Imcopa is threatening to derail a court-run auction for two crushing plants in southern Brazil that had previously drawn interest from major traders Bunge BG.N and Cargill.

R2C Investimentos, an asset manager that appointed Imcopa's former management, is challenging what it called "irregularities" related to the July 3 auction, and vowed in a statement to warn potential bidders of "the illegalities of the competitive process."

An attorney for brewer Cervejaria Petropolis, whose owner acquired most of Imcopa's defaulted loans through funds in Brazil and abroad, said ongoing litigation in multiple jurisdictions should not affect the auction aiming to raise some 1.7 billion reais ($300 million).

The auction marks the latest attempt to sell the two Imcopa crushing plants located near soy-rich regions and a large port in Parana state. It is a rare acquisition opportunity in Brazil, the world's largest soybean producer and a major soymeal exporter. However, legal risks involved and current negative crushing margins in Brazil may keep buyers at bay.

In February 2020, U.S. grains trader Bunge made the sole bid for the two plants, which have annual crushing capacity of 1.5 million metric tons of soy and specialize in non-transgenic soy processing. The bidding was run by a state bankruptcy court overseeing Imcopa's restructuring since 2013.

The deal unravelled in 2021 amid the protracted court battles involving Cervejaria Petropolis, which had a leasing arrangement to operate the plants at the time.

Bunge, which never took control of the assets, declined to comment.

In 2023, Cargill advised the court of its potential interest in Imcopa's assets, seeking clarification about the liabilities involved, documents seen by Reuters at the time showed, but a deal did not materialize.

Cargill declined to comment on Imcopa's new auction.

After Bunge's failed takeover attempt, it maintained an arrangement with Cervejaria Petropolis to supply soybeans to Imcopa in exchange for finished products. The brewer's attorney said that deal lapsed last year, when both plants were idled for maintenance.

Cervejaria Petropolis has run Imcopa since March 2024, when the bankruptcy court gave it control after a criminal probe targeting former Imcopa executives, the brewer said at the time.

That sealed investigation is still underway. R2C has denied any wrongdoing involving Imcopa's former management.

($1 = 5.6584 reais)