Brazilian sugar and ethanol producer Raizen, backed by Cosan (CSAN) and Shell (SHEL), is pursuing new funding as rising debt and weak investment returns drove its shares down 15% to a record low of 1.02 Brazilian reais ($0.19) in Sao Paulo, Bloomberg reported Thursday, citing people familiar with the matter.

As Raizen's net debt climbed to 49 billion reais as of the end of June, up 56% from a year earlier, CFO Rafael Bergman said in an earnings call that the company is actively negotiating a capital infusion, according to the report.

The report cited UBS analysts as saying that a capital raise could ease leverage pressures but cautioned it may dilute existing shareholders in the near term.

The company has been reducing expenses and divesting assets but remains challenged by Brazil's high interest rates and slower-than-expected paybacks from its biofuel and sustainability initiatives, Bloomberg said.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources, but may include rumor and speculation. Accuracy is not guaranteed.)

Price: 72.13, Change: -0.62, Percent Change: -0.85