Cosan and Shell are reportedly in advanced negotiations to infuse new capital into their joint venture Raízen, a major player in Brazil’s sugar and ethanol markets. The discussions come at a crucial time for Raízen, which is looking to address its financial challenges, including rising interest rates and production shortfalls. The plan is to present a comprehensive proposal to key creditors and debt holders before finalizing any agreements.

The proposal under consideration includes substantial investments from private equity funds managed by Banco BTG Pactual SA, which could result in the acquisition of a significant stake in Raízen's fuel distribution business for approximately R$ 5.5 billion. These negotiations focus on restructuring a portion of Raízen’s debt, with discussions leaning toward converting around 35% of the debt into equity, which could enhance the firm's financial stability and growth prospects.

This move is particularly significant as Raízen has faced pressures recently, attributed to unfavorable sugar harvests and ambitious investments that have yet to yield expected returns. The outcome of these negotiations not only has implications for Raízen's operational viability but also reflects broader trends in Brazil's energy and agricultural sectors, as companies seek to secure funding to adapt to a challenging economic landscape.