Raízen, a significant Brazilian power firm and three way partnership of Cosan and Shell, is contemplating promoting its key property in Argentina. Raízen has reportedly employed JPMorgan to advise on a potential sale of Buenos Aires’ Dock Sud oil refinery.
The deal may additionally embody a community of about 700 Shell-branded gasoline stations, property the corporate acquired in 2018 for practically R$5.3 billion ($1 billion). These websites now make up about 18 p.c of Argentina’s retail gasoline market.
Reliable trade and regulatory sources affirm that Raízen’s management overtly critiques its enterprise exterior Brazil, primarily attributable to heavy money owed—over R$17 billion ($3.2 billion) for Cosan and practically R$15 billion ($2.8 billion) for Raízen.
Economic uncertainty in Argentina has elevated these pressures. President Milei has deregulated power costs and moved away from outdated authorities insurance policies, but inflation stays excessive and forex instability nonetheless hits enterprise methods.
Although revered market and monetary stories level to Vitol, the world’s high power dealer, as a probable purchaser, each Cosan and Raízen have but to substantiate any transaction.
No aspect has revealed official documentation to indicate a accomplished deal. As a outcome, all information a few sale, whereas credible and reported by respected shops, continues to be rumor at this stage.
Argentina’s altering guidelines and unpredictable market have already pushed international firms like Exxon and Mercedes-Benz to exit or reduce.
For Cosan and Raízen, the potential sale is a technique to remedy giant money owed and deal with core enterprise, particularly with rising borrowing prices again house in Brazil.
Vitol’s curiosity highlights the long-term attraction of Argentina for power corporations prepared to wager on market restoration. Still, the present story is about danger: how main firms stability alternative in opposition to financial instability.
With no deal confirmed, Raízen’s subsequent transfer will present if even the most important gamers can journey out Argentina’s fixed turbulence—or in the event that they’ll be a part of the rising exodus.
