Cosan expects developments on Raízen capitalization plan

Brazilian conglomerate Cosan expects further developments regarding a capitalization plan for Raízen, its sugar, ethanol, and fuel distribution joint venture with Shell. During a conference call, Cosan CEO Marcelo Martins stated that talks with creditors, Shell, and businessman Rubens Ometto show strong engagement and could deliver a satisfactory market outcome.

Raízen is currently reviewing a R$ 4 billion capitalization proposal led by Shell, which might be executed through an out-of-court restructuring. The structure includes R$ 3.5 billion from Shell and R$ 500 million from Aguassanta, an investment vehicle tied to the family of Rubens Ometto, who is part of Cosan's controlling group. Cosan itself is not contributing capital, citing resource discipline and concerns that leaving Raízen's sugar, ethanol, and fuel distribution divisions unseparated does not fully address distinct cash flows. Raízen's net debt reached R$ 55.3 billion at the end of December.

Cosan reported a fourth-quarter net loss of R$ 5.8 billion, narrowing by 38% from a loss of nearly R$ 9.3 billion in the fourth quarter of 2024. Expanded corporate net debt fell 46% sequentially to R$ 9.8 billion at the end of the fourth quarter, helped by capital injections from share offerings in November. Around 14:15 Brasília time, shares of Cosan gained over 7%, while Raízen fell 1.8%.

Martins emphasized that Cosan aims to bring holding debt to zero over time through opportunistic asset divestments, but reiterated that no asset will be sold at any price. He dismissed market rumors that Cosan plans to sell its entire stake in railway operator Rumo, though partial sales remain a future possibility. The CEO also cited the recently announced initial public offering of Compass Gás e Energia as another tool for balance-sheet deleveraging.