Raizen's Divide: The Battle Over Brazil's Sugar Giant
Raizen, a major Brazilian sugar and ethanol producer, is under financial strain amid resistance to a proposal to divide the company. Shell and Cosan's joint venture faces pressure from creditors and presidential scrutiny, with fresh capital injections needed to stabilize operations.
A contentious proposal to break up Brazil's leading sugar and ethanol producer, Raizen, is meeting strong opposition from creditors, according to insiders speaking to Reuters.
The world's largest sugar producer, a joint venture between Shell and Cosan, recently reported a significant quarterly net loss of 15.6 billion reais, raising concerns about its long-term viability. BTG Pactual, part of Cosan's controlling group, suggests splitting the company to attract fresh capital, though this plan is not favored by creditors aiming for a swift recovery.
Brazil's President Lula has also shown interest in Raizen's future, discussing the issue with officials but with no decisive action taken. Meanwhile, Raizen faces the daunting task of securing over 20 billion reais in new capital to continue operations.
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