Raízen, one of Brazil's largest sugar and ethanol producers and a major fuel distributor, announced on Wednesday (28) an agreement with the federal government's legal and tax arms, the PGFN and the Receita Federal, to settle R$ 22.4 billion in federal tax debts owed by the company and other firms in the group, according to G1 and InvestNews. The deal uses a mechanism known as transação tributária, which under Brazilian law lets taxpayers renegotiate debts with the federal government in exchange for discounts on fines and interest. In Raízen's case, the discount totals R$ 8.5 billion.
Of the total negotiated, R$ 16.7 billion falls to the company. The remaining R$ 5.7 billion is the responsibility of the controlling shareholders, Shell and Cosan, the group of businessman Rubens Ometto, under applicable rules. The company's statement did not detail how that share will be paid, G1 reported.
After the discounts granted by the PGFN, Raízen's own share drops from R$ 16.7 billion to R$ 8.2 billion. Of that, R$ 5.7 billion will be settled with tax credits tied to accumulated losses, which the law allows companies to use to offset taxes owed, and the remaining R$ 2.5 billion will be paid in cash.
Part of a wider restructuring
The tax agreement is one of the conditions for putting Raízen's out-of-court restructuring plan into practice. In March, the company sought to renegotiate about R$ 65.1 billion in financial debt, in what InvestNews described as the largest out-of-court restructuring in Brazil's history. The plan, backed by 81.6% of unsecured financial creditors, was approved by a São Paulo court on July 30 and covers roughly R$ 61.4 billion owed to banks and investors, according to G1. The company is advised by Alvarez and Marsal and the law firms Bichara Advogados and Demarest Advogados.
The plan also provides for converting part of the debt into shares, a capital injection of at least R$ 3.5 billion from Shell, the sale of five mills and the split of the company into two businesses, one for fuel distribution and another for sugar and ethanol production, called Raízen Energia. On Friday (30), shareholders meet in an extraordinary assembly to vote on a new board and changes to the capital structure, InvestNews reported.
Raízen's financial troubles combine heavy investment, sugarcane harvests hurt by bad weather, swings in sugar prices and years of high interest rates that raised the cost of its debt. At the end of December 2025, net debt stood at R$ 55.3 billion. In the third quarter of the 2025/26 crop year, ended in the same month, the company posted a loss of R$ 15.6 billion, of which R$ 11.1 billion came from an accounting writedown of assets, G1 reported.
Created as a joint venture between Shell and Cosan, Raízen sits at the center of Brazil's biofuel supply chain, buying cane from growers and selling ethanol, sugar and fuel across the country. For cane suppliers and the mills still operating, the tax deal removes an obstacle to the restructuring and lowers the risk of disruption in purchases along the chain. For consumers, it does not change sugar or fuel prices in the short term, but it keeps one of Brazil's largest distribution networks running while the company works to balance its books.