Brazilian biofuel producer FS — Fueling Sustainability and Abu Dhabi’s sovereign wealth fund Mubadala Investment Co. are seeking to buy debt held by creditors of troubled biofuel giant Raizen SA, according to people familiar with the matter.
FS has hired Morgan Stanley to advise it on the potential acquisition, the people said, asking not to be named because the conversations are private. Discussions are preliminary and there’s no guarantee they will lead to a transaction.
The sales could happen amid a rework of the sugar, ethanol and fuel-distribution company, which is in the epicenter of one of Brazil’s biggest-ever corporate debt restructurings. The company, jointly owned by Shell Plc and Cosan SA, reached an agreement with creditors in March to restructure about 65 billion reais ($12.2 billion) of debt out of court.
Raizen’s financial troubles intensified earlier this year as its cash position deteriorated and its bonds plunged following a series of credit-rating downgrades. Creditors agreed to a debt-to-equity conversion that will give them more than 80% of the company’s capital. FS, Mubadala and IG4 are seeking to acquire Raizen debt before it is converted into equity.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing