Published by Global Banking & Finance Review®
Posted on February 25, 2026
3 min readLast updated: April 2, 2026
Add as preferred source on GoogleShell is ready to expand its backstop for Raizen’s recapitalization after a R$15.6B Q3 loss and rising debt. Cosan and Rubens Ometto may add funds as Raizen faces rating downgrades and pursues asset sales, including in Argentina.
By Luciana Magalhaes, Oliver Griffin and Sabrina Valle
SAO PAULO, Feb 25 (Reuters) - Oil major Shell, the healthier joint-venture partner in Brazilian sugar and ethanol producer Raizen, is ready to pour more resources into a recapitalization of the distressed company, three people familiar with the matter told Reuters.
Raizen, a top global sugar maker, is in tough financial straits after posting a third-quarter net loss of 15.6 billion reais ($3 billion) in mid-February, when it warned of "significant uncertainty" about its ability to keep operating.
The beleaguered sugar and biofuels producer saw its net debt climb to 55.3 billion reais by the end of December, due to a combination of heavy investments, erratic weather and wildfires, which led to weaker harvests and lower crushing volumes.
As of last week, Shell was open to injecting 2.5 billion reais into Raizen but has since indicated it would offer up to 3.5 billion reais, subject to certain conditions, according to two of the sources.
A third source confirmed Shell had offered more financing in recent weeks. Although nothing is settled until a final deal is inked, the source added, Shell is clearly willing to chip in a disproportionate amount to the capital injection.
Shell and its joint-venture partner Cosan, an industrial conglomerate built by Brazilian billionaire Rubens Ometto, each own 44% of Raizen.
Cosan, which is undergoing a financial restructuring of its own, could contribute 1 billion reais, while Ometto - Raizen's chairman - may provide up to 1 billion reais, contingent on financing now under negotiation, sources said.
One creditor told Reuters that to shore up its finances, Raizen would need some 25 billion reais, including fresh investment and the proceeds from the sale of its Argentine unit, which is expected to fetch about $1 billion.
Shell, Cosan, and Ometto declined to comment.
This month, Raizen appointed law firms Pinheiro Neto and Cleary Gottlieb, along with financial adviser Rothschild & Co, to assess its strategic alternatives. The move prompted downgrades of Raizen's credit ratings by major agencies including S&P Global, Fitch and Moody's.
In its report, Moody's cited the firm's high leverage, cash burn, high interest burden and weaker-than-usual results in its core sugar-ethanol segment.
($1 = 5.1292 Brazilian reais)
(Reporting by Luciana Magalhaes, Oliver Griffin and Sabrina Valle; Editing by Brad Haynes and Andrea Ricci )
Shell is prepared to increase its financial support for a recapitalization of Raizen, the Shell–Cosan sugar‑ethanol JV, as the company deals with heavy losses, high debt and rating downgrades.
Sources indicate Shell could raise its contribution to about R$3.5 billion, while Cosan and chairman Rubens Ometto may each add up to R$1 billion, pending financing and final terms.
Raizen posted a R$15.6B Q3 loss and saw net debt climb to R$55.3B, driven by heavy investments, weather impacts and wildfires that weakened harvests and volumes.
It hired Pinheiro Neto, Cleary Gottlieb and Rothschild & Co to evaluate options and is exploring divestments, including the potential sale of its Argentine assets for around $1B.
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