Americanas prepares judicial recovery of BRL 20 billion – 01/17/2023 – Market

Americanas is expected to file a recovery request in court in the next few days in the amount of approximately R$ 20 billion. This is the estimated amount that the reference shareholders would have to inject into the company to save it, but, according to people who participated in the discussions, they did not accept it.

This group is formed by the trio of billionaires Jorge Paulo Lemann, Beto Sicupira and Marcel Telles. Together, they own 31% of the company.

Lawyers Ana Basílio and José Roberto Sampaio, from the Basilio Advogados office, and Rodrigo Salomão, from the Salomao, Kaiuca & Abrahao office, were chosen by the company to lead the process for the company. The information was confirmed by Salomão, who is still working on the last details before accepting the contract.

The operation to rescue Americanas is the result of an accounting inconsistency of R$ 20 billion in its results and, to correct it, the company needs up to R$ 21 billion in new money to meet its creditors, according to calculations made by XP Investimentos.

XP analysts took into account different debt scenarios and the retailer’s operating margin, or Ebitda margin (earnings before interest, taxes, depreciation and amortization payments), and verified the need to raise something between R$ 12 billion and R$ $21 billion—resources that would be raised through a stock offering.

People close to the negotiations with the trio of billionaires inform that they would accept to invest, at most, R$ 6 billion in the company. With the refusal, the solution must be judicial recovery.

Through this process, a judge begins to manage the negotiation of the company’s debts with creditors, while a restructuring plan is assembled, presented and voted on by a meeting of creditors.

During this period, the company has safe conduct and does not have to pay any debt. The experience of companies that have already gone through this ordeal shows that, in general, creditors offer a debt discount, extend the payment period, in exchange for the company’s survival —a guarantee that they will receive their money back.

Already thinking about this exit, Americanas had previously requested to the Court of Justice of Rio de Janeiro a kind of armor so that, within a month, it would not have to pay debts from creditors — fundamentally the largest banks in the market.

This measure was taken shortly after the company’s former CEO Sergio Rial released a statement to the market reporting the accounting flaws found in the balance sheet.

BTG Pactual appealed against the decision raising suspicions that there was fraud in the company. Americanas’ total debt with the bank is at least R$2.3 billion, according to information included in the injunction.

The bank also complained that the approval of this protection was already an anticipation of the effects of an RJ that has not yet occurred.

Today, the company’s debt is R$ 19.6 billion, but Americanas has carried out credit operations to finance the purchase of goods from suppliers over the last few years that were not properly accounted for in the balance sheet as debt.

This maneuver raises the debt to something close to R$ 30 billion, according to company executives interviewed on anonymity.

However, the company’s lawyers and executives estimate that, negotiating the payment of R$ 20 billion with creditors in RJ, it will be possible to return Americanas to the rails.

When contacted, Americanas did not respond until the publication of this report.