Raízen, Creditors Set New York Talks on Debt-for-Equity Plan

Overview

• Raízen and a group of lenders will meet in New York to review the company’s offer to convert 45% of its R$65 billion debt, about R$29 billion, into shares.
• The proposal also stretches the remaining obligations over 13 years and seeks R$5 billion in new financing with a five-year grace period.
• Creditors have asked the controlling owners for better terms after the conversion ask rose from an earlier 35% idea to 45%, sending a letter to Cosan and Shell.
• Raízen filed for an out-of-court restructuring on March 11 with about 47% of creditors initially on board, and the plan needs support from more than half to move forward within a 90-day window.
• The package under discussion adds creditor influence with three of seven board seats and veto rights, and the company has begun asset sales, including a CADE-cleared divestment of a biogas unit to Gera Energia.