Shree Renuka Sugars, India's biggest refiner, on Sunday said it had bought Brazilian company Equipav SA Acucar e Alcool for Rs1,530 crore to strengthen its presence in Brazil, the world's largest producer of sugarcane and sugar.

Equipav is Brazil's seventh-largest sugar maker with a cane crushing capacity of 10.5 million tonnes a year at two plants in Sao Paolo. The Belgaum, Karnataka-based Shree Renuka was has been keen to buy the sugar and alcohol businesses of Equipav for some time now to improve access to supply of raw material at a time when availability of sugar in the Indian market has fallen short of demand, leading to higher prices and more imports.

In an interview with CNBC-TV18, company managing director Narendra Murukumbi said, ''We are done with mergers and acquisitions for the moment.'' In November, Shree Renuka had bought Brazil's sugar and ethanol producer Vale Do Ivai for Rs1,112 crore. (See: Shree Renuka Sugars to acquire Brazilian Vale Do Ivai Rs1,112 crore)

Murukumbi said the company had not taken any debt for the Brazilian acquisition and expected help from banks to restructure company's debt. Post acquisition, ''the total cane crushing capacity is expected to go up to 70,000 tonne crush per day (TCD),'' he said, adding that the promoters would excise warrants next week.

The company paid Equipav less than replacement value, he said.

Shree Renuka would fund the deal using money it had raised last year by selling shares to institutional investors and convertible warrants to promoters as well as internal accruals, said Gautam Watve, head of strategy and planning. The company had raised Rs500 crore through a qualified institutional placement in July last year.

The Murkambi family, the promoters of Shree Renuka, will contribute Rs185 crore through conversion of warrants, he added in a statement.

Equipav would use the deal proceeds to scale up its capacity, reduce debt and raise working capital. Its capacity will go up by 14 per cent to 12 million tonnes a year, making Shree Renuka among the top five sugar makers in Brazil. Vale, the other Brazilian company owned by Shree Renuka, has a cane crushing capacity of 3.1 million tonne a year.

Equipav had debt of Rs3,821 crore as on 31 December 2009, which would be renegotiated with the lenders. The transaction is subject to lenders to Equipav approving a restructuring of the debt of the Brazilian company.

Shree Renuka has been looking for assets in Brazil, where valuations are comparatively attractive despite high sugar prices. The Indian company processed about 0.65 million tonne of raw sugar between October 2008 and September 2009, and plans to refine 1.2 million tonne in 2009-10. It also makes ethanol, or ethyl alcohol, from molasses, a by-product of the cane crushing process. Ethanol can be used as a biofuel and an additive to petrol.

The Eqipav promoters, who own equity stakes in 20 companies in diverse sectors like highway concessions, bus terminals, water and sewage plants, electricity generation, mortar production, waste management and maintenance of green areas, had put their sugar business on the block around mid-2009. But the deal was delayed due to their internal differences.

The Brazilian group has been in the sugar and ethanol business since 1980.