Raízen has hired Rothschild as financial advisor, ahead of a potential debt restructuring, according to two sources close to and two sources familiar with the matter.

The move follows the hiring of Pinheiro Neto and Cleary Gottlieb Steen & Hamilton as legal advisors.

Cosan and Shell, shareholders of the Brazilian energy company, have also retained legal advisors, as reported. Cosan has hired E. Munhoz and Mattos Filho, and Shell hired Lefosse. Shell is also working with Lazard as global financial advisor.

Cosan’s recent redemption of its 2030 and 2031 bonds increased the perceived risk of a debt restructuring at its subsidiary Raízen. The two Cosan bonds have cross-default clauses with Raízen’s bonds.

Raízen faces the need to address its capital structure, amid high leverage and continuous negative cash flow generation, as reported. It was not facing an immediate liquidity crisis, however.

A spokesperson at Raízen declined to comment on the matter. An official at Rothschild did not respond to a request for comment.

Raizen’s USD 1bn 6.45% 2034 bond traded at 46.5 today, compared to 80.75 on 3 February, according to MarketAxess.