IG4 submitted non-binding bids late on Monday to investment bank Moelis & Company and advisory firm Journey Capital, which represent creditors of sugar and ethanol producer Raizen, sources familiar with the matter said. The proposals aim at purchasing restructured credits and taking control of Raizen, according to three people briefed on the discussions.
Two of those people cautioned that the transaction is not assured and that creditors are unlikely to reach a decision in the near term. One source added that creditors had agreed to Raizen’s proposal to convert debt into equity because it represented the most viable alternative at hand, but that they would prefer not to stay on as shareholders.
"So (the success of the proposal) will come down 100% to the conditions offered by IG4," the person said, reflecting that creditors view the offer through the lens of its economic and structural terms.
IG4, Moelis and Journey Capital declined to comment.
The approach follows Raizen’s announcement of a 65 billion reais debt restructuring with both local and international creditors - the largest out-of-court restructuring on record in Brazil, the sources said. IG4, which has recently taken co-control of petrochemical producer Braskem alongside Petrobras, is known for seeking control or co-control in its acquisitions, and the bidders are said to be looking to secure a controlling stake in the restructured credits.
People close to the talks said IG4 would likely proceed only if it can obtain at least 50% plus one of the restructured claims. That threshold would give the buyer de facto control of creditor decisions under the terms being negotiated, according to the people.
Those involved in the negotiations cautioned that the outlook remains uncertain. Creditors' acceptance of debt-to-equity conversion was described by one source as a pragmatic step rather than a desired outcome, suggesting a preference among creditors to exit shareholdings if a suitable purchaser emerges.
Context and market relevance
- Raizen's restructuring involves both domestic and international creditors and totals 65 billion reais.
- IG4 has a recent track record of pursuing controlling positions in industrial assets, including a co-control arrangement at Braskem.
- Advisers to creditors in the matter are Moelis & Company and Journey Capital.
The situation remains fluid, with final outcomes contingent on negotiations, the conditions IG4 proposes and the degree of creditor support IG4 can secure for any purchase of restructured credits.