Raízen achieves creditor buy-in and advances in financial restructuring
Raízen filed this Friday (5) with the 3rd Bankruptcy and Judicial Recovery Court of the District of São Paulo, its extrajudicial recovery plan, proposing a broad financial restructuring to face a debt of R$ 64.7 billion. The plan has the support of creditors representing 75.45% of the financial and unsecured credits covered by the operation.
The company, one of the largest producers of sugar, ethanol and bioenergy in the world and licensee of the Shell brand in the distribution of fuels in Brazil, states in a statement that the measure seeks to reestablish financial balance, reduce leverage and create conditions for the resumption of value generation in the coming years.
Among the main pillars of the proposal is a contribution of up to R$4 billion by shareholders. Shell will lead an injection of R$3.5 billion, while Aguassanta Participações, an investment vehicle owned by Rubens Ometto's family, will be able to contribute another R$500 million if it formalizes adherence to the plan.
In addition, the company proposes to convert 45% of the debt subject to recovery into company shares. The remaining 55% will be renegotiated through new financial instruments, with longer terms and conditions aligned with future cash generation capacity.
Business division
One of the most relevant points of the restructuring is the segregation of Raízen's operations into two independent companies until the end of 2027.
The future Raízen Energia will concentrate the sugar, ethanol and bioenergy businesses, while Raízen Combustíveis will be responsible for the distribution activities of licensed fuels and lubricants under the Shell brand.
According to the company, the separation will allow different capital structures for each operation, with debt allocation more appropriate to the characteristics of each segment.
The strategy also seeks to increase business transparency, simplify management and facilitate the execution of growth plans.
Reinforced governance
The plan foresees the maintenance of the current board during the implementation phase, but with reinforced supervision of creditors.
The current financial director (CFO), Lorival Nogueira Luz Jr., will also serve as Chief Restructuring Officer (CRO), becoming directly responsible for conducting the financial restructuring and internal reorganization of the company.
The Board of Directors will remain in its current composition until March 2027. After this period, a new panel will be formed with seven members and qualified approval rules for strategic decisions.
In a statement, Raízen's CEO, Nelson Gomes, stated that the company remains committed to the continuity of operations and the implementation of the necessary measures to restore value generation.
The formalization of the agreement, according to him, represents an important advance in the operational and financial reorganization and, in the future, in the corporate composition of Raízen. The executive claims to be building a simpler, more efficient structure that is more in line with generating value for the company's business.
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Operations continue normally
The company highlighted that the extrajudicial recovery is exclusively financial in nature and does not affect contracts with customers, suppliers, resellers or other commercial partners.
According to the company, all operational obligations will continue to be fulfilled normally, with no impact on the supply of fuel, sugar, ethanol or other products sold by the group.
The plan will now be submitted for judicial approval. The legislation provides a period of 30 days for any objections from creditors before the Court's final decision.
Source: CNN