Brazilian pulp maker Eldorado Brasil Celulose SA has decided to suspend a proposed $500 million bond sale, as a dispute between key shareholders created unease among investors, a source with knowledge of the matter said.
According to the source, who was not authorized to discuss the matter publicly and asked for anonymity, investors were rattled by a complaint by minority shareholder Paper Excellence to the U.S. Securities and Exchange Commission (SEC).
Paper Excellence had told the SEC that there were “material inaccuracies” in the bond offering information, which Eldorado has denied.
Earlier on Thursday, a court in Singapore had blocked the sale of Eldorado bonds to local investors, saying the firm should clarify information on its offering prospectus.
In a letter dated Feb. 7 to Paper Excellence representatives in Brazil, seen by Reuters, Eldorado said it would consider the shareholder “liable” if the offering was not completed. Paper Excellence has a 49.4 percent stake in Eldorado and is in arbitration to complete the full acquisition of the company.
Eldorado is controlled by J&F Investimentos SA, the owner of JBS SA, one of the world’s largest meatpackers. (Reporting by Tatiana Bautzer Editing by Chizu Nomiyama and Rosalba O’Brien)