Raízen, Brazilian producer of ethanol from sugarcane, is considering moving forward with its restructuring plan despite objections from 'offshore' bondholders, after concluding that the support of creditor banks and domestic bondholders could be enough to carry it out.
According to "Bloomberg" citing knowledgeable sources, 36% of the debt is held by banking entities and 22% by local investors. Together, this position would exceed the 50% threshold necessary to approve the plan, provided that a significant number of creditors from these two blocks do not withdraw.
In March, Raízen presented an "extrajudicial recovery" to address a liability of 65.140 million reais (11.178 million euros), originated by some failed bets linked to ethanol and aviation fuels. Added to this are the impact of high interest rates in Brazil and lower-than-expected sugarcane harvests.
Since the presentation of the process, the company has been holding talks with its creditors with the aim of closing a restructuring agreement that allows it to avoid bankruptcy. The calendar marks June 8 as the deadline to reach said pact.
The plan being negotiated includes the conversion of at least 45% of the debt into capital, which would place creditors with between 75% and 85% of the company's shareholding. In addition, the creation of a creditors' committee with supervisory functions over Raízen is foreseen, which will be chaired by its CFO, Lorival Nogueira Luz Júnior.
Exposure of Spanish banking
As Europa Press reported on March 11, Banco Santander and BBVA are among Raízen's main Spanish creditors. The Cantabrian group and its subsidiaries accumulate an exposure of 374.6 million euros linked to the energy company's operations, stemming from fixed-income funds and guarantees for the export and commercialization of electricity.
For its part, BBVA's branch in New York registered an impact of 201.7 million dollars (174 million euros) associated with a long-term pension plan with an investment horizon in 2030. Both entities have decided to adhere to the restructuring plan proposed by the Brazilian company.