Brazil's Cosan says $2 billion capital hike will relieve debt, shares plunge

Core Viewpoint - Cosan plans to raise up to 10 billion reais ($1.9 billion) through public offerings, with the sole purpose of reducing its debt, and none of the funds will be allocated to its joint venture with Shell [1][2]. Group 1: Financial Strategy - The capital raised will be exclusively used for de-leveraging Cosan, as stated by CFO Rodrigo Araujo during an investor call [1]. - The capital increase plan includes a 4.5 billion-real investment from BTG Pactual Holding and an additional 2 billion reais from Perfin Infra Fund [2]. - Cosan's founder, Rubens Ometto, will contribute 750 million reais through his family office, with a follow-up offering of up to 2.75 billion reais also planned [3]. Group 2: Joint Venture and Performance - Raizen, the joint venture with Shell, is one of the largest energy companies in Latin America but has faced challenges due to low sugarcane yields affecting its financial performance [2]. - Cosan reported a net debt of 17.5 billion reais ($3.3 billion) at the end of June, which remained stable compared to the end of the first quarter [4]. Group 3: Leadership and Succession - The financial restructuring is also intended to facilitate leadership succession at Cosan, with Ometto or a successor expected to remain chairman for the next six years [3].