Raízen Shareholders Resist Larger Capital Injection, Request New Proposal from Banks

During extensive meetings in New York this week, shareholders of Raízen have not yet shown a clear willingness to inject more capital than the R$4 billion previously announced by the company, according to sources close to the discussions. However, these sources also noted that the conversations proceeded in an amicable tone. Raízen's shareholders have requested that the banks present a new counter-proposal, one that does not foresee changes to Raízen's capital structure. Raízen, jointly controlled by Shell and Cosan – the holding company of businessman Rubens Ometto – declared R$65 billion in debt in its out-of-court restructuring request filed on March 10th. Individuals familiar with the process indicate that all parties involved intend to submit a consensual and approvable restructuring plan to the courts within the 90-day period stipulated by law. Shell's current proposal involves a capital injection of R$3.5 billion, supplemented by R$500 million from Ometto personally, totaling R$4 billion. This plan does not involve Cosan, which would be diluted in the process. Creditors, conversely, are pushing for a larger capital injection of R$10 billion. Despite progress in the talks, there is no indication that the capital contribution will reach this higher amount. On the other hand, sources confirm there has been no formal rejection of the larger sum either. Among the dollar bondholders, the group participating in the negotiations holds 70% of the bonds.