Raizen Shares Drop 5.6% After 24% Stake to Be Sold at Auction

By Jeffrey T. Lewis

SÃO PAULO--Raízen SA's preferred shares fell 5.6% after the fuel distribution company said a major shareholder plans to sell its 24% stake in the company.

The shares reached 3.23 reais (63 cents) and are down 46% over the past year through Friday's close. Brazil's benchmark Ibovespa stocks index was down 0.1% in early afternoon trading.

Raizen said the stake will be sold at an auction on Feb. 1 at a starting price of BRL3.15 per share. The seller first acquired the stake in exchange for shares in another company, and more information about the reason for the sale is needed, said analysts at XP Investimentos in a research note.

Raizen's rivals are also narrowing the gap in service quality, making the fuel company less attractive to investors, XP said.

Write to Jeffrey T. Lewis at [e-mail]

(END) Dow Jones Newswires

01-30-23 1212ET