Brazil's Raízen SA has unveiled a restructuring plan for its $12.6 billion debt burden, proposing creditors take substantial equity stakes in the sugar and ethanol producer. The plan includes a five-year grace period on debt payments, according to sources familiar with the matter. This move represents a significant shift in control dynamics for the company.

Raízen's debt restructuring comes as the company seeks to navigate challenging market conditions in Brazil's sugar and ethanol sector. The proposal would give creditors not only equity but also greater operational influence, marking a departure from traditional debt restructuring approaches. Such arrangements have become more common as companies seek alternatives to bankruptcy.

The restructuring plan's success will depend on creditor approval and Raízen's ability to maintain operations during the grace period. Industry analysts note that giving creditors equity stakes and operational say could help align interests and potentially improve the company's long-term viability. The outcome may set precedents for future restructuring deals in Brazil's agricultural sector.