IG4 Capital has submitted a new non-binding offer to creditors of Raizen SA, proposing to acquire all of their debt claims in cash. This move is a departure from Raizen's original restructuring plan, which involved converting 45% of the debt into equity and rescheduling the remaining 55%. The previous plan, which had secured support from 80.1% of creditors, would have led to creditors owning over 80% of the company.
Raizen, a joint venture between Cosan and Shell, is facing Brazil's largest out-of-court restructuring with liabilities totaling nearly $12.7 billion (R$65 billion). IG4's latest offer aims to secure 100% of the claims, ensuring the firm gains full control of Raizen. This strategy mirrors IG4's recent deal to take co-control of petrochemical giant Braskem SA alongside Petrobras, where it acquired distressed assets to become a controlling shareholder.
The private equity firm, known for pursuing control or co-control in its acquisitions, had previously offered to buy 50% plus one of Raizen's claims. However, this new all-cash offer for 100% of the debt is intended to simplify the transaction and attract a widely dispersed creditor base, many of whom, according to sources, would prefer a cash exit over becoming shareholders in Raizen. Moelis & Company and Journey Capital, advisors to Raizen's creditors, have received this new proposal.
If successful, this acquisition would allow IG4 to lead an orderly financial and operational restructuring of Raizen. The firm recently raised approximately $400 million (R$2 billion) for its third fund, specifically targeting restructuring opportunities in distressed companies across various sectors, including agribusiness, which is Raizen's primary business. Shell is expected to retain Raizen's fuel distribution business, while IG4 would likely assume control of the agribusiness division, including its 32 sugar and ethanol mills.
