Who is circling Raízen's debt
FS - Fueling Sustainability - and Mubadala are sounding out purchases of Raízen creditor claims, according to people familiar with the situation who asked not to be named because the talks are private. FS has brought in Morgan Stanley to advise on a possible move. The discussions are early and may not result in a deal, the people said.
IG4 Capital Group, which in June signaled interest in buying enough debt to seek control of Raízen, is now targeting only credit tied to the sugar and ethanol arm, the people said. Morgan Stanley, IG4, FS, Raízen and Mubadala declined to comment.
Why the window is open
Raízen sits at the center of one of Brazil's biggest corporate debt workouts. The company, owned jointly by Shell Plc and Cosan SA, agreed in March to restructure roughly 65 billion reais out of court. As part of that plan, creditors agreed to swap debt for equity that would result in their owning over 80% of the company's capital, and the firm has been exploring asset sales to lower leverage.
The backdrop has been rough. Earlier this year, Raízen's cash buffers thinned and its bonds sank after a series of credit-rating downgrades. Weak harvests, elevated interest rates and misjudged strategies added to the pressure.
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What to watch next
FS, Mubadala and IG4 are seeking to buy Raízen obligations before they flip into equity, the people said, which would change what those holdings become under the restructuring. Separately, any potential sales could take place while the sugar, ethanol and fuel-distribution group is being reworked.
FS ranks among Brazil's largest corn-ethanol makers, originating in Mato Grosso and supported by Iowa-based Summit Agricultural Group. July saw crop trader Amaggi take a 40% stake in FS, alongside a $100 million primary share issuance into the company.
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