By Brazil Stock Guide – Raizen SA (RAIZ4 BZ) won court approval for an out-of-court restructuring plan covering about R$61.4 billion ($11.8 billion) of unsecured financial debt, making the agreement binding on all creditors subject to its terms.
The ruling was issued Thursday by the 3rd Bankruptcy and Judicial Reorganization Court in São Paulo, according to a material-fact notice filed by Raizen. The plan had support from creditors holding 81.6% of the affected claims and faced no challenges from any creditor of the group.
The restructuring covers unsecured obligations owed to financial institutions as well as securities issued in Brazil and overseas. Court approval allows the debt reprofiling to apply to all eligible creditors, including those that didn’t initially consent to the proposal.
Raizen, a fuel and bioenergy joint venture between Shell Plc (SHEL US) and Cosan SA (CSAN3 BZ, CSAN US), filed the plan on June 5 after announcing negotiations in March.
The company said the approval strengthens its effort to address short-term liquidity needs while establishing a more sustainable long-term capital structure.
Debt-to-Equity Conversion
Creditors selecting the plan’s Option A will be able to convert part of their claims into Raizen equity through units and receive new secured debt securities.
Raizen will release detailed election materials outlining payment alternatives, procedures and deadlines for creditors covered by the restructuring.
The conversion is designed to reduce the company’s debt burden by exchanging a portion of eligible claims for an ownership stake. The remaining obligations will be replaced or rescheduled under the terms established in the plan.
Capital Injection of Up to R$4 Billion
The restructuring also calls for a cash capital increase of between R$3.5 billion and R$4 billion at closing.
Shell Brasil Petroleo, a unit of Shell, will participate in the transaction. Aguassanta Participacoes, a private company controlled by the family of Rubens Ometto Silveira Mello, may also join the capital increase. Ometto controls Cosan, Raizen’s other shareholder.
The fresh capital is expected to bolster liquidity as the company carries out the restructuring and related corporate transactions.
Fuel and Energy Businesses to Be Separated
Raizen’s plan includes corporate reorganizations, asset segregation and divestments aimed at separating its fuel-distribution and energy businesses.
The company is moving forward with the preparatory steps needed to implement the transactions, including the issuance of new securities, conversion of eligible debt, capital increase and operational separation.
Raizen said it will provide additional disclosures as the restructuring reaches key milestones. The full plan remains available on the company’s investor-relations website and through Brazil’s securities regulator, the CVM.
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