Raízen, a major energy and bioenergy company controlled by Cosan and Shell, has seen its credit rating downgraded by S&P Global from CCC- to SD, indicating a selective default. This significant downgrade follows Raízen's recent filing for extrajudicial recovery to renegotiate R$ 65 billion in debts. The agency noted that this form of recovery allows for the suspension of payments to creditors, but it does not absolve the company of its total obligations.

The selective default designation reflects that while Raízen is attempting to address a majority of its debt obligations through this recovery process, it does not cover all debts. S&P highlighted that the effective execution of Raízen's recovery plan is contingent upon receiving approval from the majority of its creditors. As of the current reports, Raízen claims to have garnered support from 47% of its creditors, and the company faces a 90-day window to secure the necessary majority approval to enact its recovery plan.

This downgrade could have significant implications for Raízen's operations and financial stability, particularly as the energy sector is already facing various challenges. The company's ability to navigate this financial situation will be crucial not only for its future but also for investor confidence and the overall perception of the Brazilian energy market. Analysts will be closely watching how Raízen manages its creditor relationships and the forthcoming negotiations to stabilize its financial standing.