Shell Plc and Cosan SA are advancing a significant capital injection into their Brazilian sugar and ethanol joint venture Raízen SA, with investment bank BTG Pactual SA also involved in the discussions. The move comes as the companies seek to strengthen Raízen's financial position amid challenging market conditions for biofuels.

According to sources familiar with the matter, the capital infusion aims to present a restructuring plan to Raízen's main creditors and bondholders before finalizing the transaction. The timing suggests mounting pressure on the joint venture's balance sheet, though specific figures for the capital injection have not been disclosed. The involvement of BTG Pactual indicates a formal financial structuring process is underway.

The potential deal underscores the strategic importance of Raízen to both Shell and Cosan, which formed the joint venture in 2010 to combine their Brazilian ethanol and sugar operations. Any restructuring would need to balance the interests of the two parent companies while addressing the concerns of Raízen's creditors. The capital injection could provide the joint venture with greater financial flexibility as it navigates volatile commodity markets and evolving energy transition dynamics in Brazil.