Raízen seeks debt restructuring approval without foreign bondholder support

Brazilian sugar‑ethanol and fuel distributor Raízen, a Shell‑Cosan joint venture, entered extrajudicial recovery in March with roughly R$65 billion of debt after a combination of high interest rates, falling sugar and ethanol prices, and costly investments. The company must obtain creditor approval for a restructuring plan by 8 June, requiring support from holders of more than 50 % of the debt.

Raízen expects to secure the necessary votes from domestic banks, which own about 36 % of the applicable debt, and local bondholders holding roughly 22 %. Offshore bondholders are opposing the plan and are demanding better terms, including a larger equity stake. The proposal calls for converting at least 45 % of the debt into shares, which would give creditors 75‑85 % ownership of the company and create a creditor committee overseen by CFO Lorival Nogueira Luz Jr.

Shell has reaffirmed its commitment to inject around R$3.5 billion, while company chairman Rubens Ometto offered a R$500 million capital contribution that was rejected amid governance disputes. The restructuring aims to avoid a shift to a full judicial recovery, which could exacerbate losses for shareholders, creditors, and suppliers.