UPL Brazil arm to invest $86.7 million in Sinova, raise stake to 55.81%

UPL Ltd said it will further invest approximately $86.7 million (BRL 450 million) in its associate company, Sinova Inovações Agrícolas S.A., as part of an equity infusion aimed at strengthening the business.

The company, in a regulatory filing, said the investment will be made by its step-down subsidiary, United Phosphorus Holdings Brazil B.V. (UPL Brazil), which has entered into an agreement for the additional stake purchase.

Following the investment, UPL Brazil’s shareholding in Sinova will increase from 49.97% to 55.81%. Despite the increase, Sinova will continue to be classified as an associate company as UPL will not exercise control, the filing noted.

The investment is intended to address Sinova’s working capital requirements and support debt reduction. The company added that Sinova plays a key role in promoting and reselling UPL’s products in Brazil’s Cerrado savanna region, one of the country’s major agricultural zones.

The shares of the company ended 1.77% lower in the session on Friday, April 25. The stock has fallen over 21% in the year so far.

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