Brazil's Raizen hires financial and legal advisers to try and fix its fortunes
To improve its liquidity, Brazil's Raizen appointed Pinheiro Neto & Cleary Gottlieb to act as legal?advisers as well as Rothschild & Co. as financial advisors.
The sugar and ethanol producer, which is in dire straits, has also announced that it and its advisors have begun an exploratory and preliminary assessment of financial and economic alternatives as they try to turn their fortunes around.
Raizen is a joint venture of Brazilian conglomerate Cosan with London-listed Shell. It has suffered a string of heavy quarterly losses and amassed high debt levels.
In November last year, the company reported that it had incurred a net loss of more than 2.3 billion reals ($443.2 millions) in the second quarter for the 2025-2026 crop of sugar. The net debt for the six-month period ended September 30 was 53.4 billion reals.
Raizen announced earlier that day it had appointed advisers to strengthen its liquidity position and optimize its capital structure, but did not provide any names.
Later, three sources with knowledge of the situation reported that Raizen had hired Pinheiro neto and Cleary Gotlieb.
One person said that recent results showed that the capital structure was not sustainable, but added that there is still time for the company to turn things around.
S&P Global, the rating agency, has lowered its rating for Raizen from 'CCC+ to 'CCC+ after the news broke that the company appointed advisors.
S&P stated in a statement that accompanied its decision, "The engagement by financial advisors indicates a high probability of debt restructuring following the 'weakening of signals from the previously expected capitalizations and asset sales."
Fitch cut Raizen's rating on Monday as well, initially to a 'B' then later to a 'CCC.
Cosan, Shell and the company have been evaluating options to inject more capital in the sugar maker. This includes bringing new investors into it.
Raizen will report its financial results of the third quarter for the 2025-2026 Sugar Crop on February 12.
(source: Reuters)
