High interest rates expected to sustain wave of corporate restructurings
03/18/2025
More than 20 publicly traded companies in Brazil are currently undergoing bankruptcy protection or out-of-court restructuring, a figure that is likely to rise in 2025 as more firms struggle to meet their debt obligations amid persistently high interest rates. Experts consulted by Valor anticipate yet another record year for corporate financial distress in the country.
Recent cases include consumer goods company Bombril and agribusiness group Agrogalaxy, while notable ongoing proceedings involve telecom group Oi, which has filed for bankruptcy protection for the second time, and retailer Americanas, which sought court protection after the disclosure of a multi-billion-real accounting fraud. Publicly listed companies tend to stand out in these proceedings due to the scale of their debts—some among the largest in the country—and because regulatory requirements mandate financial disclosures, shedding more light on their challenges. This transparency also offers insight into the situation of smaller firms, which often face even greater financial distress.
A Valor Data analysis of 52 companies in Brazil’s benchmark Ibovespa stock index that have reported 2024 results shows that average leverage increased from 1.47 times to 1.64 times.
Fabiana Solano, a partner at law firm Felsberg Advogados, warned that the financial crisis is worsening even for larger companies. “Persistently high interest rates and global instability are having an immediate impact on businesses,” she said. While smaller firms are in a more fragile position, she noted that even listed companies face significant debt burdens. “For them, this is a moment for caution and vigilance.”
Among the publicly traded firms in distress is shipbuilding and offshore services company OSX, controlled by Eike Batista, which, like Oi, has filed for bankruptcy protection for a second time. Energy company Light has been under restructuring since 2023. Meanwhile, textile manufacturer Teka, which has been under bankruptcy protection for over a decade, recently had its liquidation order confirmed.
The number of filings would be even higher if not for companies that managed to restructure their debts through bilateral negotiations, such as airline Azul and e-commerce solutions provider Infracommerce. Wind blade manufacturer Aeris and Viveo, a healthcare distributor backed by the Bueno family (owners of diagnostic services provider Dasa), are also negotiating with creditors to avoid more drastic measures.
While listed companies typically have broader access to credit—both through bank loans and capital markets—the equity market remains frozen, reflecting investor aversion to stocks and capital outflows from equity funds. The only expected stock offering in four months is from insurance company Caixa Seguridade, a transaction motivated solely by the need to comply with B3’s liquidity requirements.
Regulatory and market implications
Under current rules, publicly traded companies undergoing bankruptcy protection are excluded from B3’s theoretical indexes but can still have their shares traded. This rule was introduced over a decade ago following the collapse of the X Group, which had several of the most liquid stocks on the exchange at the time.
Roberto Zarour, a restructuring partner at law firm Lefosse Advogados, pointed out that, unlike privately held firms, listed companies must follow strict disclosure requirements, keeping investors informed through material fact statements and market announcements. The challenge, he said, is balancing transparency with the confidentiality required in sensitive negotiations.
Marcelo Ricupero, a restructuring partner at law firm Mattos Filho Advogados, noted that the rising number of cases among listed companies underscores the widespread nature of the crisis. “No company is immune to the current turbulence. The trend is for more cases to emerge,” he said.
Mr. Zarour from Lefosse added that debt restructuring among publicly traded companies—typically more governed and with better credit access—highlights the deeper struggles of smaller firms. Many took on debt when interest rates were low but are now struggling to cope with the cost of borrowing in a high-rate environment.
Laura Bumachar, a partner at Dias Carneiro Advogados, pointed out that many companies have accumulated debt over the years and are now feeling the strain. “I believe 2026 will be even worse. Many companies are barely managing to keep up. A new wave of filings is coming,” she warned. Her firm has recently seen a surge in cases, not only for bankruptcy protection and out-of-court restructuring but also for outright bankruptcy.
According to Ms. Solano of Felsberg Advogados, one expected consequence of the crisis will be greater market concentration. Stronger companies with capital will seek mergers and acquisitions as financially weaker firms shrink or collapse. Mr. Ricupero from Mattos Filho noted that distressed M&A activity is on the rise.
When contacted, Light said it approved its restructuring plan in May 2024. “In a sign of confidence in the company’s future, creditor demand to convert debt into equity was 50% higher than the plan’s set limit,” it noted. The company added that all restructuring steps have been carried out as planned.
Azul reiterated its January statement upon concluding creditor negotiations, highlighting that the agreements will improve cash flow over the next three years and result in a pro forma deleveraging of approximately 1.4 times based on third-quarter 2024 figures.
Aeris said its financial negotiations are publicly known and have been disclosed through market announcements. The company emphasized that these negotiations “do not involve discussions or requests related to bankruptcy protection.”
Viveo reported that between late 2024 and early 2025, it successfully renegotiated and adjusted the covenant schedule of its debt with creditors.
Teka said that the decision to liquidate while maintaining operations “ensures that the company continues to function, removing uncertainty about its future and reaffirming its commitment to business continuity.” The company acknowledged that shareholders may resist the move, as they will be the most negatively affected due to the loss of equity value and control. However, it emphasized that its priority is to keep operations running, protect jobs, and maximize creditor repayments. The ruling also strengthens the company’s asset value, potentially attracting investors.
Infracommerce said that, in agreement with financial institutions and new investors, it has launched a restructuring plan to adjust its capital structure and secure new funding sources for its transformation. The company stressed that this plan is being implemented outside the scope of bankruptcy protection.
Agrogalaxy, Americanas, Oi, and OSX declined to comment, while Bombril did not respond.
*By Fernanda Guimarães — São Paulo
Source: Valor International