Brazil's Raizen Shares Plunge on Debt Restructuring Plan
Raizen's Debt Restructuring Plan Sends Shares Tumbling
Shares in Brazilian sugar and ethanol producer Raizen plunged nearly 17% on Thursday after the company unveiled the terms of its out-of-court restructuring, including converting 45% of restructured debt into equity at 0.25 reais ($0.05) per share.
Seeking Creditor Support
The company is racing to secure creditor backing, with groups of creditors and bondholders deciding whether to support the plan. Raizen aims to file the plan by June 3. In March, it announced an agreement with certain creditors to restructure approximately 65 billion reais in debt, with creditors holding 47% of unsecured debt endorsing the restructuring.
The proposal includes a capital injection from controlling shareholder Shell and possibly Chairman Rubens Ometto. The conversion price of 0.25 reais per share is below the current market price, raising concerns among investors.
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