Rabid creditors consider giving Chairman Ometto the option of capital injection

According to two people who were familiar with the discussions, the creditors and bondholders for Brazil's Raizen met on Tuesday to finalize terms of its extrajudicial recovery plan, including whether Chairman Rubens Ometo can inject new capital in the future.

Sources said that a likely solution by Tuesday evening was to allow Ometto to decide later whether or not to provide new funds to the sugar & ethanol producer.

According to the general outline of the plan recently presented in Brazil creditors and the company expected a 3.5 billion reais ($700 millions) capital injection from co-controller Shell, but it was unclear whether Ometto will follow through with an initial commitment of 500 million reais.

One of the sources said that the group, in light of Ometto's hesitation, devised a solution to allow Ometto to have a window of several month during the implementation of the plan to decide if they want to invest more capital?into the firm.

In March, the Raizen Group announced that it had reached a negotiated agreement with certain bondholders and creditors to restructure debt obligations of approximately 65 billion Reais, subject to the broader acceptance and?agreement regarding the final terms.

Ometto did not immediately respond to an inquiry for comment.

(source: Reuters)