Raízen secures creditor backing as debt restructuring advances
Raízen won backing from about 75% of creditors for a plan that would hand them more than 80% control as sugar prices stayed weak.
On June 8, about 75% of creditors backed Raízen’s restructuring plan, which would leave lenders with more than 80% control of the company. The Brazilian sugar and ethanol producer is trying to stabilize a balance sheet built around R$65.1 billion in debt after warning in February of “significant uncertainty” about its ability to continue operating. On March 11, Raízen reached an out-of-court agreement with creditors and bondholders to restructure about R$65.1 billion, and holders of 47% of the unsecured debt had already endorsed the plan at that stage.
Under the final plan, 45% of the company’s debt would be converted into equity at a reference price of R$0.25 per share, while Shell proposed injecting R$3.5 billion to support the reorganization. Creditors had initially pushed for at least R$25 billion in new shareholder capital, but Cosan stayed out of the capital increase. Rubens Ometto’s holding company, Aguassanta, had explored a possible R$500 million contribution, and Ometto also sought to keep his seat as chairman of Raízen’s board, a condition creditors did not accept.
TMA Brasil chairman Luiz Fabiano Saragiotto called the transaction the largest ever out-of-court restructuring in Brazil. IG4 was also circling the company, with the private-equity firm aiming to finalize a potential acquisition by the end of March 2027 after pitching creditors and other stakeholders. IG4 prefers majority control when executing turnarounds.
Sugar traded at 14.89 US cents a pound on June 30, up 0.59% on the day but still below year-earlier levels, according to TradingEconomics. Raízen recorded R$315 million in year-to-date efficiency gains, cut consolidated general and administrative expenses by 23% and reduced capital expenditures by 26% to R$3.4 billion. The company also trimmed its sugarcane mill count to 24 from 30 and divested power-generation assets.
In the ethanol, sugar and bioenergy segment, crushing fell to 59.6 million tons from 63.7 million tons in the year-to-date period, even as second-generation ethanol volumes more than doubled year on year. Raízen’s Q4 2025/26 results put net debt at R$53.4 billion, up 49% year on year, and leverage at 5.1x. Raízen’s Q4 25/26 earnings release was scheduled for June 29, with a conference call on June 30.
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