A proposal to spin off Raízen (), a sugar and ethanol producer and fuel distributor, is facing strong resistance from creditors in discussions on how to revitalize and recapitalize the struggling company, they told Reuters people familiar with the conversations.
The world’s largest sugar producer — a Shell joint venture with industrial group Cosan () — and warned of “relevant uncertainty” about its ability to continue operating.
Sources claim that BTG Pactual (), which manages a fund that joined the group of Cosan’s controlling shareholders last year, proposed dividing the company into two, separating the fuel distribution business from other assets. The gas station unit could then receive fresh capital from the bank, the sources said.
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The idea was not well received by creditors, who want to keep the company intact to ensure a faster recovery and are putting pressure on shareholders to inject as much new capital as possible into Raízen, according to the sources.
Raízen, Cosan, BTG Pactual and Shell refused to comment on the matter.
Shell reiterated that it is working with Raízen and Cosan to support the company’s deleveraging.
Concerns about the future of Raízen caught the attention of President Luiz Inácio Lula da Silva, according to sources.
Raízen shareholders were present at the latest meeting, at which Lula expressed concern but made no call for specific action, a source said.
Neither BNDES nor Petrobras, which is evaluating other potential investments in biofuels, have shown interest in capitalizing on Raízen, the sources said.
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Petrobras is prevented from investing in fuel distribution after getting rid of its own network of stations, now called Vibra Energia ().
Petrobras is not evaluating the acquisition of Raízen’s assets, the state-owned company said. BNDES did not immediately respond to requests for comment.
Raízen needs more than R$20 billion in new capital, said one of the sources, who asked not to be identified because the negotiations are private.
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On Wednesday, the.
The sugar and biofuels producer, which is going through a difficult phase, saw its net debt rise to R$55.3 billion at the end of December, due to a combination of heavy investments, unstable weather and fires in sugarcane fields, which resulted in weaker harvests and lower crushing volume.
