Brazil’s Raizen appoints legal and financial advisers in bid to fix its fortunes

By Luciana Magalhaes and Oliver Griffin

SAO PAULO, Feb 9 (Reuters) – Brazil’s Raizen has appointed law firms Pinheiro Neto and Cleary Gottlieb as legal advisers and Rothschild & Co as financial adviser to strengthen its liquidity, the company said in a securities filing on Monday.

The beleaguered sugar and ethanol producer also said that it has begun a preliminary and exploratory assessment of economic and financial alternatives along with its advisers, as the firm tries to turn its fortunes around.

Raizen, a joint venture between Brazilian conglomerate Cosan and London-listed oil company Shell, has posted a series of heavy quarterly net losses and racked up high levels of debt. 

Last November the company reported a net loss of over 2.3 billion reais ($443.2 million) for the second quarter of the 2025-2026 sugar crop, while net debt for the six months ended September 30 hit 53.4 billion reais. 

Raizen said earlier in the day that it had appointed advisers with the aim of strengthening its liquidity position and optimizing its capital structure, without providing any names.

Reuters reported later, citing three sources familiar with the matter, that Raizen had hired Pinheiro Neto and Cleary Gottlieb.

“Recent results show that the capital structure is not sustainable,” one of the people said, though adding that the company still has some time to try and turn things around.

Rating agency S&P Global cut its ratings for Raizen to ‘CCC+’ following the news that the company had appointed advisers. 

“The engagement of financial advisors indicates the high likelihood of debt restructuring, following the weakening signals of the previously expected capitalization and asset sales,” S&P said in a statement accompanying its decision.

Fitch also cut Raizen’s ratings on Monday, first to ‘B’ and later in the day to ‘CCC’.

The company has previously announced a number of divestments as it seeks to bring its debt under control, while owners Cosan and Shell have evaluated options for injecting more capital into the troubled sugar maker, including the possibility of bringing in new investors. 

Raizen is due to report its financial results for the third quarter of the 2025-2026 sugar crop on February 12. 

($1 = 5.1897 Brazilian reais)

(Reporting by Luciana Magalhaes and Oliver Griffin; Additional reporting by Andre Romani and Fernando Cardoso; Writing by Oliver Griffin; editing by Diane Craft)