By Brazil Stock Guide – Negotiations between Raízen’s shareholders and creditors in New York have yet to show a clear willingness from the company’s controllers to increase the announced capital injection of R$ 4 billion, according to Agência Estado. Sources close to the discussions indicate that while the talks have been amicable, shareholders have requested a new proposal from banks without altering Raízen’s capital structure.
Raízen, co-controlled by Shell and Cosan — owned by businessman Rubens Ometto and BTG Pactual — reported R$ 65 billion in debts in its extrajudicial recovery request filed on March 10. Insiders reveal that all parties aim to finalize a consensual restructuring plan for judicial approval within the 90-day legal timeframe.
Creditor demands include a capital injection of R$ 10 billion, while Shell proposes R$ 3.5 billion, with an additional R$ 500 million from Ometto, excluding Cosan to prevent dilution.
Bondholders, holding 70% of Raízen’s US$ 5 billion debt, include significant players like AllianceBernstein and T. Rowe Price. The initial plan involved converting 45% of debts into shares, with 55% extended over 10 to 13 years.
Implications for Shareholders
The proposed capital structure may grant Shell and Ometto a greater share of Raízen compared to creditors, who would contribute about R$ 30 billion through debt conversion. Shareholders could appoint four board members, while creditors would have three.
Shell, leading the negotiations, has not commented on the ongoing discussions, according to the local newspaper.