Raízen, a major sugar and ethanol producer and fuel distributor, has filed for an out-of-court restructuring plan, according to sources familiar with the matter. The company has secured support from creditors representing more than 40% of its outstanding debt.
The plan includes approximately $65 billion in eligible debt. As of December, Raízen held roughly $17.3 billion in cash, according to the filing.
Banks hold approximately half of the total debt, while bondholders, holders of CRAs and debenture holders, account for the remaining portion. Both groups represent 40% of the total amount.
The restructuring aims to provide Raízen with a protected environment to preserve cash, particularly as the sugarcane harvest season approaches – a period requiring significant working capital. This move comes as investors closely monitor developments in the agricultural sector.
The out-of-court restructuring will only suspend payments on financial debts, while payments to suppliers will continue as normal, the report indicates.
E.Munhoz Advogados, Pinheiro Neto and Rothschild & Co. Are advising the company on the operation.
On Wednesday, March 4, Raízen announced it was evaluating the implementation of a “comprehensive and definitive” solution to strengthen its capital structure and signaled it might pursue an out-of-court restructuring if necessary.
According to the filing, the proposed plan involves a capital contribution of $4 billion, with $3.5 billion coming from Shell and $500 million from a vehicle controlled by Aguassanta Investimentos, which is owned by the controlling shareholder of Cosan.
In February, the energy producer reported a net loss of $15.6 billion in the third quarter of the 2025/26 crop year, six times higher than the same period in the previous cycle. The company’s cumulative loss for the first nine months of the crop year totaled $19.8 billion.
On Tuesday, March 10, Moody’s Ratings downgraded Raízen’s credit rating from Caa1 to Caa3, citing the company’s high level of debt and persistent negative cash flow.
The downgrade followed the company’s announcement of potential measures to restructure its capital structure, including a capital injection of $3.5 billion from Shell and an additional $500 million from businessman Rubens Ometto, the controlling shareholder of Cosan.
Cosan stated during a conference call on Tuesday that it expects to observe further developments regarding a capitalization plan for Raízen in the coming days. Cosan CEO Marcelo Martins said the company believes the discussions surrounding Raízen could lead to a satisfactory solution for the market.
“We believe today that it should lead to an evolution that You can find a satisfactory solution for the market,” Martins stated.
