Raízen debt restructuring and recovery process

Raízen is undergoing a major extrajudicial recovery process in Brazil to address approximately R$ 65 billion in debt. The recovery plan involves splitting the joint venture between Shell and Cosan into separate entities for fuels and for sugar and alcohol.

IG4 Capital expressed intent to present a binding offer to creditors within three weeks to gain control of the company, specifically targeting the sugar and alcohol operations. Their strategy involves acquiring over 50% of credits to facilitate restructuring, potentially converting credits into shares.

To implement the recovery plan, Raízen has called an Extraordinary General Meeting for October 30. The agenda includes a proposed reduction of social capital by up to R$ 35 billion, which would involve delivering securities issued by Raízen Energia to shareholders in the same class and proportion as their current holdings. The company also intends to increase the authorized capital limit to 200 billion shares to facilitate capital increases outlined in the recovery plan approved by the São Paulo Court in June.

Governance changes are also on the table, including the removal of current Board of Directors members and the election of a new board consisting of seven titular and seven substitute members. Additionally, preferred shareholders will hold a specific assembly to vote on the creation of Class B preferred shares. If approved, these would hold the same economic rights as current preferred shares, which would then be redesignated as Class A with restricted voting rights.