Banks Submit New Raízen Plan, Seek 30% of Argentina Sale Proceeds and Ometto's Removal

Overview

• Bank creditors including Bradesco, Santander Brasil, Banco do Brasil and Itaú proposed using 30% of any Argentina asset-sale proceeds to pay down debt and called for chair Rubens Ometto to be replaced.
• The bank plan sets no cash injection, while a separate bondholder proposal called for a R$8 billion capital raise and greater say in management.
• Both creditor groups have discussed taking as much as 90% of equity in exchange for addressing about 45% of the liabilities.
• Shell pledged R$3.5 billion in March, with Ometto adding R$500 million as part of the rescue.
• Raízen, a Cosan–Shell joint venture with roughly R$65 billion in debt, seeks an out-of-court deal after weak sugar and ethanol results and high interest costs hurt cash flow.