Raízen S.A., Brazil’s largest sugar and ethanol producer, is considering an out-of-court restructuring process to address its mounting debt, according to statements made Tuesday by Shell Brasil CEO Cristiano Pinto da Costa.
The move comes as Raízen grapples with a gross debt of R$73 billion (approximately $13.8 billion USD), a figure that has prompted urgent discussions with its shareholders, Shell and Cosan, and even intervention from the Brazilian government. President Lula met with stakeholders to discuss the situation, emphasizing the government’s interest in finding a viable path forward for the company, Pinto da Costa revealed.
Shell has committed to injecting R$3.5 billion (approximately $630 million USD) into Raízen’s capitalization, with an expectation that Cosan will contribute a proportional amount. “We expect the other shareholder to contribute proportionally,” Pinto da Costa said. He cautioned, although, that “the degree of complexity involved in solving Raízen’s situation should not be underestimated.”
Raízen’s financial difficulties stem from a combination of factors, including an “accelerated expansion” across multiple business lines and the impact of high interest rates in Brazil. The company’s net debt had surged 56% to 49 billion reais ($9.8 billion) as of June 2025, according to a report from August 2025. Raízen has been actively selling assets in an attempt to improve its financial position, with over $200 million in asset sales planned as part of the restructuring.
Creditors, including international bondholders and banks, have reportedly requested up to R$25 billion (approximately $4.5 billion USD) in capital injection from the controlling shareholders. Some creditors have likewise opposed a proposed plan to separate Raízen’s sugar and ethanol businesses from its fuel distribution segment, a move Cosan has advocated for to allow each unit to operate independently.
Rating agencies have responded to the growing concerns, with both S&P and Fitch downgrading Raízen’s credit rating amid the debt restructuring concerns. The company’s adjusted EBITDA fell 23% year-on-year to R$1.9 billion (~$345 million) in the last reporting period, falling short of analyst expectations.
Stakeholders are currently engaged in daily meetings to explore potential solutions, with no firm deadline established. Pinto da Costa indicated a sense of urgency among the parties involved, but stressed the need for a stable operational foundation before any significant restructuring can be implemented. Raízen declined to comment on the ongoing discussions.
