Brazil Energy: Raízen Recovery Plan Impact

Raízen has unveiled a restructuring plan involving BRL 65bn in debt-to-equity conversion and a potential business split by 2027. Goldman Sachs maintains a Neutral rating on Cosan, noting the plan offers no clear positive asymmetry for the holding discount.

Key Takeaways

• 1.Raízen's restructuring plan may lead to the segregation of its core business into two entities: Raízen Energia and Raízen Combustíveis by end-2027.
• 2.The plan includes a massive potential debt-to-equity conversion of BRL 65bn of debt into new shares, threatening significant dilution for existing shareholders like Cosan.
• 3.Shell is expected to invest BRL 3.5bn as new equity, while Cosan faces potential BRL 7.2bn in tax contingency refunds depending on legal outcomes.

Table of Contents

• Brazil Energy: First Take: Raízen unveils details of recovery plan; what does it mean for CSAN and fuel distributors?
• Additional details from Raízen's out-of-court restructuring plan
• Valuation and key risks
• Disclosure Appendix

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