Key facts
- FS and Mubadala are seeking to buy debt from Raizen creditors.
- Raizen has R$ 61.4 billion in debt.
- Fitch Ratings placed Raizen on restricted default status.
- The restructuring plan suspends debt payments and capitalizes interest.
Brazilian biofuel producer FS and Abu Dhabi's sovereign wealth fund Mubadala Investment Co. are reportedly looking to purchase debt from creditors of Raizen SA, a major biofuel company currently undergoing a financial restructuring. Fitch Ratings has downgraded Raizen and its subsidiary Raizen Energia to restricted default status following the approval of an out-of-court restructuring plan that addresses R$ 61.4 billion in debt. This restructuring involves suspending debt payments and capitalizing interest until its completion. Raizen also plans to raise up to R$ 3.5 billion through a new share issuance and reform its board, while reducing capital by up to R$ 35 billion. The company is also working to separate its energy operations from its fuel distribution business.