Americanas billionaires must close an agreement with banks – 07/04/2023 – Market

Creditor banks must sign an agreement with Americanas’ reference shareholders – billionaires Jorge Paulo Lemann, Marcel Telles and Beto Sicupira– and become partners in the century-old retail chain that continues in judicial recovery, with a debt of R$ 43 billion.

The agreement, according to people who participated in the negotiations, involves the withdrawal, by financial institutions, of the lawsuits that today paralyze payments to suppliers and require the seizure of emails and documents signed by company executives.

In exchange, the founding trio of Americanas agrees to spend up to R$12 billion on the company – R$10 billion immediately, and another R$2 billion in two installments of R$1 billion, released once a year.

Reports indicate that the banks consider the new figures proposed by the shareholders closer to the company’s needs, although, next week, they plan to stretch the rope to get another R$ 2 billion, which would increase the contribution to R$ 14 billion.

Under the previous proposal, the reference shareholders committed to disbursing R$ 7 billion, repurchasing part of the debt of R$ 12 billion with suppliers and converting part of the financial debt (with banks) into company shares. The remaining difference would continue as subordinated debt, that is, it would remain at the end of the line of creditors.

The retailer’s biggest debt is in the hands of private banks. Debts amount to R$ 19.5 billion, with Bradesco the largest creditor (R$ 5.1 billion), followed by Santander (R$ 3.6 billion), BTG (R$ 3.5 billion), Itaú Unibanco (R$ 3.5 billion). BRL 2.7 billion) and Safra (BRL 2.5 billion). Public banks –Banco do Brasil (R$1.6 billion) and Caixa (R$500 million)— are also on the list.

Next week, the parties involved in the negotiations should start putting the terms of the agreement on paper so that it can be submitted to the judge responsible for the process.

If it is approved at a meeting of creditors, Americanas may exit recovery. If it fails, the chances of bankruptcy are increased.

Pressure from the banks

The reference shareholders chose Rothschild as the financial institution responsible for negotiations with creditors and appointed two representatives: Luiz Muniz and Roberto Thompson Motta.

Initially, according to reports, the main creditor banks, which negotiate individually with the representatives of the trio, were irritated by the proposal and raised the tone in the lawsuits as a way of putting pressure on them.

One of them went to the Federal Supreme Court (STF) asking that the production of evidence be released through search and seizure of emails and documents signed by the company in the last ten years. Febraban, the federation of banks, ended up entering the process as an interested party.

Judicial pressure has unlocked the negotiations, according to executives from two banks who were interviewed on condition of anonymity. For them, shareholders want to avoid bearing their personal fortune in case fraud is proven in the network’s accounting inconsistencies.

In the last week, it was the turn of the billionaires’ negotiators to raise the tone in the debates with the banks. They said they had access to the trustee’s report mentioning that, in the past, Itaú and Santander reported to KPMG (the company that audits Americanas’ balance sheet) “strange requests” from directors of the retail group.

One of them would be to hide operations with suppliers from the company’s debt table.

Known in the market as withdrawn risk or forfait, these transactions are at the origin of the accounting inconsistencies of approximately R$ 20 billion in the company’s balance sheets.

In the conversations, the negotiators of the trio of shareholders used the information in the report to disarm the banks, which claim ignorance of the operations.

Itaú and Santander questioned the information in the report and said they had denied the directors’ request. They consider the trio’s maneuver a ruse for administrators to share the responsibility with the banks.

“The company and its lawyers try to create untrue versions that seek to remove the sole and exclusive responsibility of its management, including the board of directors and the board, for the preparation and accuracy of the financial statements”, said Itaú-Unibanco in a note.

Santander adds that it has always fully reported all the balances of the company’s operations in the Central Risk System, maintained by the Central Bank, which could even be a source of auditing.

“The allegations of the company and its lawyers are nothing more than an attempt to divert the real responsibility of the administrators and board of directors of the company”, said the bank via advisory.

fraud suspicions

For financial institutions, there is no doubt that there was accounting fraud to inflate the retailer’s balance sheets and, consequently, the value of the company’s shares —which directly benefited shareholders and directors whose variable remuneration was linked to shares, a very common practice in companies managed by the trio of billionaires.

Bradesco and Safra, for example, in their actions in court, seek, through the production of evidence, to attest to the existence of fraud to demand the disregard of legal personality, which opens the way for shareholders to pay debts with equity guys.

The reference shareholders are keen to make it clear to the main creditor banks that they were harmed and that they had no idea of ​​the operations being investigated today.

Losses, according to shareholders, amount to R$ 29 billion. The trio’s stake in Americanas alone (31%) fell from R$15 billion to R$300 million.

In the calculation, they already consider the resources to be injected if the agreement with the banks is closed in the coming weeks.

They say they are committed to saving the company not just from the loss of value on their investment, but from reputational damage.

For this reason, one of the negotiators questioned the request for an injunction against the payment of small creditors outside the judicial recovery, as a way of guaranteeing the retailer’s operation until September of this year.

Although it had judicial authorization, the transaction was barred by a request for an injunction from one of the banks. There are still 2,502 suppliers to receive R$ 121 million. Shareholders released R$ 1 billion for the payment.

Sought after, Itaú, Santander and LTS, the company that brings together Lemann, Sicupira and Telles, declined to comment on the ongoing negotiations.