Raizen: Revisiting post restructuring plan approval – lowering PO and reiterate Underperform

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Raizen: Revisiting post restructuring plan approval – lowering PO and reiterate Underperform

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Raizen

Revisiting post restructuring plan approval

– lowering PO and reiterate Underperform

Reiterate Rating: UNDERPERFORM | PO: 0.19 BRL | Price: 0.38 BRL

Debt holders to receive one unit (two shares) at R$0.25 30 June 2026

Raizen filed its Extrajudicial Reorganization Plan in early June, with support from 80.2% Equity

of the unsecured debt covered by the plan, totaling R$64.7bn. The key outcomes are: (i)

a R$3.5bn capital injection by Shell and eventually R$500mn by Rubens Ometto at

Key ChangesR$0.25/sh; and (ii) the conversion of 45% of the restructured debt into equity at the

same price. Debt holders will receive units composed of one ordinary and one preferred (BRL) Previous Current

share, resulting in 83% stake post-restructuring. Completion is expected by Mar/27, Price Obj. 0.62 0.19

followed by the planned spin-off into Raizen Energia and Raizen Combustiveis. 2027E Rev (m) 214,827.0 191,275.2

2028E Rev (m) 229,522.1 193,592.1

2029E Rev (m) 250,107.9 210,132.0R$0.19 PO; R$0.16 for Combustiveis, R$0.05 for Energia

We revise our model to account for weaker sugar & ethanol fundamentals, incorporate 2027E EPS -0.09 -0.01

dilution from the debt conversion and adjust our valuation to a 50% DCF/50% target 2028E EPS 0.07 0.01

multiple (in line with the rest of our coverage), applied separately to Raizen Energia and 2029E EPS 0.28 0.03

Raizen Combustiveis, versus 100% DCF for Raizen SA. We lower our PO to R$0.19/sh

(from R$0.62), split between Raizen Energia (R$0.05), Raizen Combustiveis (R$0.16), and Isabella Simonato >>

Research Analyst

NPV of tax settlements (-R$0.02). We reiterate our Underperform rating, as we see Merrill Lynch (Brazil)