June 26, 2017 / 11:38 AM / a year ago

Brazil's Eldorado eyes sale of eucalyptus forests, paper says

SAO PAULO, June 26 (Reuters) - Eldorado Brasil Celulose SA has sounded out potential buyers for its forests, newspaper Valor Econômico reported on Monday, as the Brazilian wood pulpmaker seeks fresh capital amid a corruption scandal ensnaring its controlling family.

Canada’s Brookfield Asset Management Inc has shown interest in Eldorado’s forests in Três Lagoas, in southern Brazil, Valor added, without specifying how it obtained that information.

Eldorado executives said there were no ongoing talks over the sale of the company’s forests, according to Valor.

Media representatives for Eldorado and Brookfield contacted by Reuters were not immediately available to comment.

A sale of Eldorado’s forests would represent an alternative to holding company J&F Investimentos SA’s plan to sell its controlling stake in the pulpmaker, which has struggled to generate enough cash to fund operations.

Still, it could clash with the terms of a non-disclosure agreement with Arauco, a unit of Chile’s Empresas Copec SA , Valor said. Reuters reported on June 16 that Arauco has made an offer for the 81 percent stake in Eldorado held by the Batista family through J&F.

Eldorado is among J&F’s flagship assets put up for sale after agreeing to pay a record-setting 10.3 billion real ($3.2 billion) fine for its role in corruption scandals circling President Michel Temer. Rival pulpmakers Fibria SA and Suzano Papel & Celulose SA are also mulling an offer for Eldorado, according to local media reports. (Writing by Bruno Federowski, Editing by Franklin Paul)

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