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Proceeds
Estimate
net proceeds to company from this offering will be
approximately US$ 1,617 million, after deducting estimated
underwriting discounts and commissions and estimated
offering expenses payable by company. This estimate of
net proceeds is based on;
(1)
An offering price of R$32.50 per common share, which is
the closing price on the "São Paulo Stock Exchange" of
the common shares of "Cosan" on July 27, 2007 and
(2)
The selling exchange rate of R$1.9069 to US$1.00, as
reported by the Central Bank on July 27, 2007.
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Use
of proceeds
A
substantial portion of the net proceeds will be
advanced to "Cosan" in the form of
intercompany loans, capital contributions or a
combination thereof to fund the following projects:
Company
expect this greenfield project will start producing
ethanol in fiscal year 2009 and reach full production in
fiscal year 2012, with an expected crushing capacity of
10 million tons of sugarcane and total ethanol
production of approximately 240 million gallons
(900 million liters) per year;
-
Approximately
US$500 million will be used for capital expenditures
relating to the expansion of existing facilities,
which will add an estimated 10.6 million tons
of additional crushing capacity by fiscal year 2012;
-
Approximately
US$325 million will be used for the development of
cogeneration systems for company's Gasa, Univalem,
Diamante, Ipaussu and Barra mills;
-
Approximately
US$100 million will be used to purchase mechanical
harvesters for approximately 80% of the sugarcane
company cultivate by fiscal year 2012, reducing
production costs and emissions, and profiting from
the non-burned extra biomass;
-
Approximately
US$50 million will be used to increase crop yields
and enhance efficiency, as well to reduce production
costs;
-
Approximately
US$25 million will be used to invest in ten field
stations that will be developed by CanaVialis S.A.
to identify sugarcane varieties that can be
cultivated in different regions of Brazil;
-
Any
remaining proceeds will be used for general
corporate purposes, which consist of future
acquisitions and other investments in technology,
infrastructure and logistics, through projects
carried out by company directly or through its
subsidiaries.
In
the event that the net proceeds from the global
offering are less than US$1,650 million, company
will fund the above projects using a combination of
cash flows from operations, debt financings or,
possibly, future equity offerings. These projects
involve expenditures over a four-year period through
fiscal year 2012.
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