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Bunge, BP To Form 50:50 JV To Create Bioenergy Company In Brazil - Quick Facts

Bunge Ltd. (BG), a leader in agriculture, food and ingredients, announced Monday an agreement with BP plc (BP) to form a 50:50 joint venture that will create a leading bioenergy company in Brazil, one of the world's largest fast-growing markets for biofuels.

Bunge will receive cash proceeds of $775 million in the transaction, comprising $700 million in respect of non-recourse Bunge debt to be assumed by the joint venture at closing, and $75 million from BP, subject to customary closing adjustments.

The proceeds will be used to reduce outstanding indebtedness under the Company's credit facilities, resulting in a stronger balance sheet and greater financial flexibility.

The joint venture, to be called BP Bunge Bioenergia, will operate on a stand-alone basis, with a total of 11 mills located across the Southeast, North and Midwest regions of Brazil.

With 32 million metric tonnes of combined crushing capacity per year, the joint venture will have the flexibility to produce a mix of ethanol and sugar. It will also generate renewable electricity, fuelled by waste biomass from the sugar cane and sell surplus electricity to the Brazilian power grid.

The new business is expected to be headquartered in Sao Paulo. Mario Lindenhayn from BP will be Executive Chairman, Geovane Consul from Bunge, will be Chief Executive Officer. BP and Bunge will have equal representation on the Board of Directors.

The transaction, unanimously approved by the Board of Directors of Bunge, is expected to close n the fourth quarter of 2019, subject to customary conditions, including receipt of required regulatory approvals.

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