Raizen Seals Brazil’s Biggest-Ever Out-of-Court Debt Deal

Markets

Brazil just saw its largest corporate debt workout ever, and it was struck without a bankruptcy court running the show. The Raizen extrajudicial recovery restructures roughly R$64.7 billion (US$12.7 billion) in debt, a landmark for one of the country’s biggest energy companies.

Raizen is a joint venture between Brazil’s Cosan and the oil major Shell. It is one of the world’s largest producers of sugar and ethanol and Brazil’s second-biggest fuel distributor, running the Shell-branded service stations across the country.

Like many capital-heavy companies, it borrowed heavily to grow. Then Brazil’s steep interest rates turned that debt into a burden, forcing a reckoning.

What an Extrajudicial Recovery Is

Brazil offers two main routes for a company in debt trouble. A judicial recovery is court-supervised, public and heavy, similar to a US Chapter 11. An extrajudicial recovery is lighter: the company negotiates directly with creditors and asks a court only to ratify a deal most of them already accept.

It works only when a large majority of lenders are on board. Raizen got there, winning support from 19 financial institutions and more than 80 bondholders in Brazil and abroad, with roughly 75% adhesion.

Inside the Numbers

The plan reworks about R$64.7 billion (US$12.7 billion) in financial debt, the largest extrajudicial agreement ever closed in Brazil.

Roughly 45% of the restructured debt will convert into equity, meaning some creditors trade what they are owed for a stake in the company. The remaining 55% is refinanced or amended through new debt securities maturing in 2032 and 2034.

Crucially, the controllers are putting money in. Shell is injecting about R$3.5 billion (US$686 million), and Aguassanta, tied to the Ometto family that controls Cosan, may add up to R$500 million (US$98 million).

Why It Matters

For Raizen, the deal buys time and breathing room: a longer runway to pay, a lighter interest load and the Shell brand still firmly behind it.

For Brazil, it is a sign of the strain that high interest rates put even on blue-chip companies, and a template showing other indebted giants a path between muddling through and a full bankruptcy filing.

Frequently Asked Questions

What did Raizen restructure?

Raizen closed an extrajudicial recovery covering about R$64.7 billion (US$12.7 billion) in financial debt, the largest out-of-court corporate debt restructuring in Brazil’s history.

Who is backing the plan?

The deal won support from 19 banks and more than 80 bondholders, with about 75% creditor adhesion. Shell is injecting about R$3.5 billion (US$686 million), with a possible R$500 million (US$98 million) more from the Ometto family’s Aguassanta.

What is an extrajudicial recovery?

It is a Brazilian out-of-court restructuring in which a company negotiates directly with creditors and asks a court only to ratify a plan most of them already accept, lighter and faster than a full judicial recovery.

Sources

• Terra – Raizen fecha maior acordo de recuperacao extrajudicial do Pais
• Seu Dinheiro – Raizen protocola plano de recuperacao extrajudicial

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