en.Wedoany.com Reported - On June 4, Brazilian energy company Raízen announced the sale of its Argentine downstream business (fuel refining and sales) to Latam Downstream Holdings and Silver Projects I for $1.42 billion. These two companies are controlled by Mercuria Energy Group, a Swiss multinational commodity trading firm. The transaction will be paid in cash, with the buyers also assuming the debt of Raízen's Argentine operations. This move is seen as a necessary measure to alleviate the company's financial difficulties.
Raízen announced this asset sale one day after releasing a summary of its out-of-court restructuring plan. The company stated that the proceeds will be used for capital structure management, adding that the transaction aligns with its strategy of optimizing the asset portfolio, simplifying operational structure, and maintaining disciplined capital allocation, focusing on priority markets and regions. The sale of Argentine assets aims to reduce financial leverage, which had risen to 5.3 times in the third quarter of the 2025/26 crop year (ending December). The amount raised exceeded expectations—during the February quarterly earnings call, CEO Nelson Gomes had indicated the deal could raise nearly $1 billion.
Since its initial public offering (IPO) in 2021, Raízen launched a massive investment cycle, having raised nearly 7 billion reais at the time. According to Levante Investimentos, Raízen's total investments since the IPO amount to 46.8 billion reais, a significant portion of which was used to build new second-generation ethanol (E2G) production plants. In its third-quarter earnings report, the company stated that the asset divestitures announced at that time were expected to generate approximately 5 billion reais in cash and improve the asset portfolio. However, Gomes emphasized that selling assets and restructuring operations alone would not be sufficient; the company also needs capital injections to reduce leverage to the ideal "balance sheet equilibrium" range of 2.0 to 2.5 times.
After repeated negotiations between shareholders and creditors, Raízen submitted a version of its out-of-court restructuring plan on June 3 to restructure approximately 65 billion reais in debt, which will be reviewed by creditors. The plan proposes a capital injection of 3.5 billion reais from Shell, equivalent to 45% of the debt conversion amount, while Aguassanta Investimentos, owned by the Rubens Ometto family, could inject an additional 500 million reais. The plan would convert 45% of the total restructured debt into shares at a price of 0.25 reais per share, with the remaining 55% converted into new debt instruments allocated to Raízen Combustíveis and Raízen Energia. The plan also includes two repayment options: one offering an 80% discount on the included claims, with a lump-sum payment due by March 31, 2047; the other is a cash payment equal to the lower of 75% of the relevant claim or 9,750 reais, with a total cap of 150 million reais. Additionally, the plan involves governance structure changes, with the board of directors consisting of seven members: four appointed by creditors supporting the plan (including the chairman), three appointed by Shell, and Cosan not participating.
Raízen's shares closed up 2.63% at 0.39 reais on June 3. As of that time, the stock had fallen 51.2% year-to-date, reducing its market capitalization to 527.8 million reais.
This article is compiled by Wedoany. All AI citations must indicate the source as "Wedoany". If there is any infringement or other issues, please notify us promptly, and we will modify or delete it accordingly. Email: news@wedoany.com
