Risks related to the business and industries
- Unpredictable weather conditions,
pest infestations and diseases may have an adverse impact on agricultural
production and may reduce the volume and sucrose content (TRS) of sugarcane
that we can grow or purchase in a given harvest.
- Fluctuation in market prices could
adversely affect our financial conditions and results of operations.
- Ethanol prices are correlated to the
price of sugar and are becoming closely correlated to the price of oil.
Consequently, a decline in the price of sugar will adversely affect our ethanol
and sugar businesses and decline in the price of oil may also adversely affect our
- The expansion of our business through
acquisitions pose risks that may reduce the benefits we anticipated in our transactions.
- Adverse conditions may create delays
in or the suspension of the construction of our Ivinhema mill and/or
significantly increase the amount of its expected investments.
- A significant increase in the price
of the raw materials we use in our operations, or the shortage of such raw
materials, could adversely affect the results of our operations.
- Increased energy prices and frequent
interruptions of energy supply could adversely affect our business.
- Fluctuations in international trade
and economic policies may affect the export of our products.
- A worldwide economic downturn could
weaken demand for our products or lower prices
- Our business is seasonal, consequently
our revenues may fluctuate significantly depending on the growing cycle of our crops.
- Our dairy and beef cattle are
vulnerable to diseases.
- The insurance coverage policy we poses
may not be sufficient to cover significant losses due to adverse weather
- Fluctuations in market prices for our
products could adversely affect our financial condition and results of
- A reduction in the market demand for
ethanol or a change in governmental policies that reduce the amount of ethanol
required to be mixed with gasoline may adversely affect our business.
- Substantial infrastructure development
by persons and entities outside our control is required in the sale and
distribution of ethanol. These improvements may not occur on a timely basis, if
- Our ethanol business may be harmed by
competition from alternative fuels, products and production methods.
- A substantial portion of our assets
is farmland that is highly illiquid. The
price of our farms may be impacted by changes government policies such as price
controls, export restrictions or the imposition of duties.
- We have agriculture partnerships
relating to a significant portion of our sugarcane plantations and cannot
guarantee that they will be renewed after our respective terms.
- We may be subject to labor disputes
that may adversely affect us.
- We may not possess all of the permits
and licenses required to operate our business, or we may fail to maintain the
licenses and permits we currently hold. This could subject us to fines and
other penalties, which could adversely affect the results of our operations.
- We are subject to extensive
environmental regulation. Concerns regarding climate change may result in even
stricter environmental regulations.
- Some of the agricultural commodities
and food products that we produce contain genetically modified organisms. The
use of GMOs in food has been met with varying degrees of acceptance in the
markets in which we operate.
- If our products become contaminated,
they may be subject to product liability claims, product recalls and
restrictions on exports that would adversely affect our business.
- We may be adversely affected by unfavourable
outcomes in pending legal proceedings.
- Our principal shareholders have the
ability to direct our business and affairs, and our interests could conflict
- IFRS accounting standards related to
biological assets require us to make numerous estimates in the preparation of
our financial statement and therefor limit the comparability of our financial statements
to similar issuers using U.S. GAAP.
- Proposed new IFRS standards and
amendments may have a significant effect on our financial statements.
- Internal controls over financial
reporting may not be effective and our independent registered public accounting
firm may not be able to certify the effectiveness of our methods. This could
have a significant and adverse effect on our business and reputation.
- Certain of our subsidiaries have
substantial indebtedness which could impair our financial condition and
decrease the amount of dividends we receive.
- The historical and pro forma
financial information in this prospectus may not accurately predict the costs
of our operations in the future.
- We have a history of operating losses
and negative cash flows which may continue and adversely affect our ability to
meet our business and growth objectives.
- The terms of the indebtedness of, and
past breaches of financial ratio covenants by, certain of our subsidiaries
impose significant restrictions on our operating and financial flexibility.
- Fluctuations in interest rates could
have a significant impact on the result of our operations, indebtedness and
- We may not be able to renew our credit
lines when they mature, depriving them of needed liquidity.
- There is a risk that we could be
treated as a U.S. domestic corporation for U.S. federal income tax purposes,
which could materially increase our U.S. federal income tax liability and
subject any dividends we pay to U.S. federal withholding tax.
Risks associated with the countries in which we operate
- We operate our business
in emerging markets. The results of our operations and financial conditions are
dependent upon economic conditions in those countries in which they operate,
and any decline in economic conditions could harm our results of operations or
- The economies of the countries in
which we operate may be adversely affected by the deterioration of other global
- Governments have a high degree of
influence in the economies in which we operate which could adversely affect our
results of operations or financial condition.
- Currency exchange rate fluctuations
relative to the U.S. dollar in the countries in which we operate our businesses
may adversely impact the results of our operations and our financial condition.
- Inflation in some of the countries in
which we operate, along with governmental measures to combat inflation, may
have a significant negative effect on the economies of those countries and, as
a result, on our financial condition and results of operations
- Disruption of transportation and
logistics services or insufficient investment in public infrastructure could
adversely affect our operating results.
Risks Related to Argentina
- Argentine economic and political
conditions and perceptions of these conditions in the international market may
have a direct impact on our business and our access to international capital
and debt markets. This could adversely affect the results of our operations and
- The economy of Argentina may be
affected by its government’s limited access to financing from international
- The lack of financing for Argentine
companies may have an adverse effect on the results of our operations in
Argentina and on the market price of our common shares.
- Government intervention in Argentina
may have a direct impact on our prices and sales.
- Government measures to pre-empt or
respond to social unrest may adversely affect the Argentine economy and our business.
- Disputes between the Argentine
government and the agricultural sector may adversely affect the Argentine
economy and our business.
- The Argentine government may order
salary increases to be paid to employees in the private sector, which would increase
our operating costs.
- An increase in export duties and
controls may have an adverse impact on our sales.
- Exchange controls could restrict the
inflow and outflow of funds in Argentina.
Risks Related to Brazil
- Brazilian economic and political
conditions and perceptions of these conditions in international markets have a
direct impact on our business and our access to international capital and debt
markets and could adversely affect our results of operations and financial
- Changes in Brazilian tax laws may
increase our tax burden.
- Widespread corruption and fraud
relating to ownership of real estate may adversely affect our business,
especially its land transformation business.
- Social movements and the possibility
of expropriation may affect the normal use of, damage, or deprive them of the
use of or fair value of our properties.
- Recent changes in Brazilian rules
concerning foreign investment in rural properties may adversely affect our investments.
- The Brazilian government has
exercised, and continues to exercise, significant influence over the Brazilian
- Our business in Brazil is subject to
- Government laws and regulations in
Brazil concerning the burning of sugarcane could have a material adverse impact
on our business or financial performance.
Risks related to the Offering
- There is no existing market for our
shares, and we do not know whether one will develop to provide you with
adequate liquidity. If our stock price fluctuates after this offering, you
could lose a significant part of your investment.
- The initial public offering price per
common share is substantially higher than our net tangible book value per
common share immediately after the offering, and you will incur immediate and
- Sales of substantial amounts of our
shares in the public market, or the perception that these sales may occur,
could cause the market price of its shares to decline.
- Transformation into a public company
may increase our costs and disrupt the regular operations of its business.
- As a foreign private issuer, we are permitted
to rely on exemptions from certain NYSE corporate governance standards
applicable to U.S. issuers, including the requirement that a majority of an
issuer’s directors consist of independent directors. This may afford less
protection to holders of our common shares.
Risks Related to Investment in a Luxembourg Company
- We are a Luxembourg corporation
(“société anonyme”) and it may be difficult for you to obtain or enforce
judgments against them or its executive officers and directors in the United
- You may have more difficulty
protecting your interests than you would as a shareholder of a U.S.
- You may not be able to participate in
equity offerings, and you may not receive any value for rights that we may