Bondholders and bank creditors of Brazil’s energy‑fuel giant Raízen have lodged a restructuring proposal that would hand them up to 90% equity stake in exchange for taking on roughly 45% of the company’s debt. Sources familiar with the negotiations say the plan aims to reduce the firm’s leverage while giving creditors controlling ownership.

Current debt levels have pressured Raízen’s credit ratings, prompting lenders to seek a more permanent solution than a simple cash tender. By converting a sizable portion of the obligations into equity, creditors hope to lock in future cash flow from the company’s sugarcane‑derived ethanol and fuel operations, sectors that have shown resilience despite volatile commodity prices.

If the swap proceeds, existing shareholders could see their holdings diluted dramatically, potentially triggering governance changes. Management will need to negotiate board representation with new majority owners, a process that could reshape strategic decisions on capital spending and export markets. Market observers are already gauging how the equity shift might affect Raízen’s valuation on the B3 exchange.

The proposal underscores the tightening credit environment for Latin American energy firms, where lenders increasingly demand equity stakes to safeguard exposure. While the deal could stabilize Raízen’s balance sheet, it also signals that future financing may come at the cost of ownership dilution, a trade‑off that will shape the company’s growth trajectory.