Cosan and Shell discussing bringing BTG Pactual into Raízen
In Brazil, Bloomberg reports Cosan SA and Shell Plc are in advanced talks to inject new capital into their Brazilian sugar and ethanol joint venture, Raízen SA, according to people familiar with the matter. The aim is to present a plan to the company’s main creditors and bondholders before finalizing the negotiations.
The proposal on the table includes investments from private equity funds managed by Banco BTG Pactual SA, which would acquire a significant stake in Raízen’s fuel distribution business for approximately 5.5 billion reais (US$1.05 billion), according to the sources, who asked not to be identified because the information is private. The parties are still negotiating what percentage of Raízen’s debt would be converted into equity, with discussions focusing on approximately 35%, the sources said.
Raízen needs fresh financing after being pressured by high interest rates, lower-than-expected harvests, and a series of ambitious investments that have yet to generate significant returns. Its credit rating has been sharply downgraded, and its bonds have plummeted in tandem with its deteriorating financial situation.
The plan under discussion includes a capital increase of between 3 billion and 5 billion reais from Raízen’s current shareholders, according to sources. Shell would contribute between 1.5 billion and 3.5 billion reais, depending on the company’s future royalty claims, the sources indicated.
Category: Fuels
