Raízen’s Loss Balloons to $1.45 Billion as Brazil’s Biggest Debt Deal Nears
Key Facts
- Q4 net loss of R$7.33bn ($1.45bn), nearly three times the year-earlier loss; the full 2025/26 safra lost R$27.1bn ($5.37bn).
- Net debt reached R$58.2bn ($11.52bn), up almost 70% in a year, with leverage at 5.2 times EBITDA.
- The business itself improved. Adjusted EBITDA rose 46% and the Shell-branded fuel network lifted its EBITDA 60.4%.
- It is Brazil’s largest-ever extrajudicial recovery, a R$65bn ($12.87bn) debt deal now backed by 80% of creditors.
- Shell anchors R$3.5bn ($693M) of fresh capital, while private-equity firm IG4 aims to control the company by March 2027.
- A 2027 split will carve Raízen into separate sugar-ethanol and fuel-distribution companies.
The Short Version
Raízen, the Cosan-Shell joint venture and the world’s largest sugarcane processor, lost R$7.33bn ($1.45bn) in its fiscal fourth quarter. The loss, though, is not the real story.
The company is in the home stretch of Brazil’s biggest-ever debt restructuring, a R$65bn deal that brings Shell back as anchor capital and clears a path for buyout firm IG4 to take control by 2027.
Underneath the red ink the business is mending. Cost cuts and stronger fuel-station margins lifted operating profit, even as weak commodity prices and heavy debt costs dragged the bottom line down.
The restructuring looks set to succeed, lifting the threat of collapse that has hung over the stock. But it does so by converting billions of debt into new shares.
That means today’s shareholders face heavy dilution even as the company is rescued. The rescue and the pain are the same act.
01 The numbers
Strip out the headline loss and the operating picture is improving. Adjusted EBITDA rose 46% from a year earlier to R$2.8bn ($554M), the company cut about R$1.0bn ($198M) of costs over the harvest year, and capital spending fell by R$3.3bn ($653M).
The bottom line still went the wrong way because the gap between operating cash and debt service widened. Net revenue fell 11.1% to R$51.3bn ($10.16bn) on soft sugar and ethanol prices, while net debt jumped 69.9% to R$58.2bn ($11.52bn).
| Indicator | Q4 25/26 | Change YoY |
|---|---|---|
| Net revenue | R$51.3bn ($10.16bn) | −11.1% |
| Adjusted EBITDA | R$2.8bn ($554M) | +46% |
| Fuel distribution EBITDA | R$1.7bn ($337M) | +60.4% |
| Net loss (quarter) | R$7.33bn ($1.45bn) | +192% |
| Net loss (full safra) | R$27.1bn ($5.37bn) | 6.5x worse |
| Net debt | R$58.2bn ($11.52bn) | +69.9% |
| Leverage (net debt / EBITDA) | 5.2x | −0.1x |
Leverage edged down only because EBITDA improved, not because the debt shrank. That is the whole problem in one line.
02 How Raízen got here
Raízen listed on the B3 in August 2021 at a R$76bn ($15bn) valuation, sold as the vehicle that would lead Brazil into a green-fuels boom on second-generation ethanol. Five years on, RAIZ4 trades around R$0.42, the market value has collapsed to R$4.45bn ($881M), and the stock has been ejected from the Ibovespa.
Chief executive Nelson Gomes, brought in by chairman Rubens Ometto in November 2024 to speed up deleveraging, has overseen roughly R$5bn ($990M) of asset sales. Those include an exit from the Oxxo convenience-store venture and the $1.42bn sale of the Argentine fuel business to a Mercuria-led consortium.
It was not enough. On March 11 the company filed for extrajudicial recovery covering R$65bn ($12.87bn) of unsecured debt, larger than any prior court-supervised Brazilian restructuring.
The plan converts about 45% of covered claims into Raízen units at R$0.50 ($0.10) each, above the current share price, and refinances the other 55%. Shell adds R$3.5bn ($693M) of fresh capital, with Ometto’s Aguassanta vehicle potentially chipping in up to R$500M ($99M).
Live Company IntelligenceRaízen — the full investor dossier
03 The bull and bear case
The bull case
- Operations are recovering. Adjusted EBITDA is up 46%, with cost and capex cuts now visible in the numbers.
- The restructuring is nearly done. With 80% creditor support and a Shell capital backstop, court approval looks likely within months and the worst headline risk is passing.
- There is a conversion floor. Debt converting to equity at R$0.50 a unit sets a rough floor, and a successful IG4 bid would clean up governance.
The bear case
- The dilution is severe. Converting roughly R$29bn ($5.7bn) of debt at R$0.50 a unit means billions of new shares and a heavy hit to existing holders.
- The commodity cycle is unkind. Sugar and ethanol prices remain weak, and corn-ethanol competition is structural rather than passing.
- The debt still grows. Even after asset sales, net debt keeps rising, and financing costs with Selic at 14.25% remain a drag.
04 What happens next
The near-term path runs through the courts. With 80% of creditors signed up, judicial approval of the recovery plan is expected within months, which would lock in the Shell capital and the debt-to-equity conversion.
The bigger question is control. IG4 — already co-controller of Braskem alongside Petrobras — has a non-binding offer to buy a majority of the converting claims and take charge by March 2027, after which the company is set to split, leaving Shell with fuel distribution and IG4 with the sugar-ethanol arm.
For investors the signals to watch are the court sign-off, whether IG4’s bid firms into a binding deal, and the direction of sugar and ethanol prices. Those, more than any single quarter, decide what the rebuilt Raízen is worth.
05 Connected coverage
For the prior chapter, see A Buyout Firm Bids to Seize Control of Brazil’s Raízen and Shell-Backed Raízen Sells Its Argentina Fuel Arm to Mercuria. For the parallel restructuring, see Braskem Asks Creditors for Time as the Chemical Giant Fights On.
Frequently Asked Questions
Why is Raízen’s loss so much bigger than the prior year if EBITDA improved?
Operationally Raízen did better in Q4 — adjusted EBITDA rose 46% to R$2.8bn ($554M), the fuel-distribution arm posted a 60.4% EBITDA jump, and cost discipline removed R$1bn ($198M) from the run-rate over the safra.
The bottom line still deteriorated because finance expenses ballooned with Selic at 14.25%, the safra was hit by weather that cut the cane crushed, and the company booked write-downs tied to its restructuring. The third quarter alone produced a R$15.65bn ($3.10bn) loss on impairments.
What does the R$65 billion ($12.87bn) debt restructuring actually do?
The extrajudicial recovery, Brazil’s largest ever, covers Raízen’s unsecured obligations, including foreign bonds, debentures and agribusiness receivables. Roughly 45% of covered claims will convert into Raízen units at R$0.50 ($0.10) each.
The remaining 55% is refinanced on longer terms. Shell is putting in R$3.5bn ($693M) of fresh capital, with Cosan’s Aguassanta vehicle potentially adding up to R$500M ($99M), and 80% of creditors have signed on, above the 50% legal threshold.
What is IG4 trying to do?
IG4 Capital, the private-equity firm that recently took co-control of Braskem alongside Petrobras, has submitted a non-binding offer to acquire majority ownership of the credits being converted into equity. Its goal is to control the company by the time the recovery closes, targeted for March 2027.
That would let IG4 sit at the top of the cap table alongside or in place of Cosan and Shell. If it advances, the planned split would likely leave Shell with fuel distribution and IG4 with the sugar-ethanol-bioenergy arm.
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