By Brazil Stock Guide – Raízen SA, the Brazilian bioenergy joint venture of Cosan SA (CSAN3 BZ) and Shell Plc (SHEL LN), has received a new restructuring proposal from its bank creditors, according to people familiar with the matter. The information was first reported by Bloomberg.
The plan includes allocating 30% of proceeds from the sale of Argentine assets toward debt reduction, said the sources, who asked not to be identified as the discussions are private. Creditors are also reiterating demands for the replacement of Rubens Ometto, chairman and founder of Cosan, from Raízen’s leadership.
The proposal from banks including Banco Bradesco SA (BBDC4 BZ), Banco Santander Brasil SA (SANB11 BZ), Banco do Brasil SA (BBAS3 BZ) and Itaú Unibanco Holding SA (ITUB4 BZ) does not specify a capital injection amount. Bondholders, however, have put forward a separate plan calling for an R$8 billion ($1.6 billion) infusion, along with governance changes and increased influence over the company.
In March, Shell agreed to inject R$3.5 billion into Raízen as part of restructuring efforts, while Ometto committed an additional R$500 million. Earlier this month, the company proposed a plan that could leave creditors holding up to 70% of its common equity.
Both bondholders and banks are pushing for stricter terms, including the possibility of taking up to 90% of equity in exchange for restructuring about 45% of the company’s debt.
Raízen, which filed for an out-of-court restructuring in March with roughly R$65 billion in liabilities, has been negotiating with creditors to avoid a formal bankruptcy process. The company has faced pressure from high interest rates, heavy capital expenditures that have yet to generate returns, and operational challenges in its sugar and ethanol divisions, leading to a series of weaker-than-expected earnings.
Cosan, Raízen, Ometto and the creditor banks declined to comment. Shell did not immediately respond to a request for comment.
Leave a Reply