Cosan Won't Inject Capital Into Raízen, Expects Dilution and Possible Exit

Overview

• Cosan, which on Friday said it will not add new capital to Raízen, signaled that its stake will shrink and may be sold.
• Management expects heavy dilution because creditors are negotiating to swap part of roughly R$65 billion in Raízen debt for shares and Shell plans a cash injection.
• Cosan has stopped booking Raízen’s results in its holding accounts, showing the asset is no longer central to the group.
• CEO Marcelo Martins outlined a plan to cut debt by selling stakes and said dissolving the holding in three to five years is a reasonable path.
• Cosan reported expanded net debt of R$11.5 billion for the first quarter, a 34% drop from a year earlier, after steps such as the Compass market listing.