With low cash position, retail giant tries to reverse bank compensations while negotiating a standstill

01/19/2023

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Company has R$800 million available in cash, sources say — Foto: Marcia Foletto/Agência O Globo

Nine days ago, when Americanas presented the accounting inconsistencies to the market, the then CEO Sergio Rial pointed out a comfortable cash position to face the current obligations and run the operation while the company started renegotiations with the creditor banks and investigations about possible frauds. At that time, the announced cash was R$7.8 billion.

The reality of the company’s cash position now, however, is R$800 million available, sources told Valor’s business website Pipeline. This is what has made the company anticipate in the coming days (hours, potentially) the filing for a court-supervised reorganization.

“This is being decided right now. It may be filed in the following hours,” said a source.

The company considered about R$3 billion in receivables from suppliers that it would get earlier from banks – this door, however, was closed by the lenders given the exposure already taken and the ratings downgrade. BTG Pactual and BV (former Votorantim) last week offset or froze a total of R$1.4 billion (R$1.2 billion from BTG and R$220 million from BV).

Another R$1 billion are financial investments without immediate liquidity, half referring to a LFT (Financial Treasury Bills) Bacen, which is part of a regulatory requirement. There was R$2.4 billion left for the operation, but since the beginning of January, the retail giant has already consumed R$1.6 billion in its business routine – a retail operation, as is known, is highly capital intensive.

“The cash position now is of R$800 million,” a source said. “The company will have to accelerate the filing for a court-supervised reorganization.” The internal understanding, according to Pipeline, was that a standstill would provide 30 days for the negotiation, before the protection from creditors ends. If there was no consensus, then the plan would be ready.

But there is no more time, as an injunction obtained today by BTG made clear. “R$1.4 billion doesn’t solve the company’s life today, but it buys operational days,” said a source.

Safra also blocked the company’s access to the system today, according to sources, but it was still unclear whether the compensation was made, according to Pipeline. The volume here was much smaller, around R$92 million.

The banks are questioning in court the validity of a court-supervised reorganization, considering a scenario of fraud. The company tries to separate operation and investigation and insists, in meetings with creditors, that guilty individuals will be held accountable and that the primary shareholders remain committed to inject nearly R$7 billion in the business.

The company is still trying to overturn the injunction obtained by BTG for the compensation of R$1.2 billion. If this decision is reversed, it can suspend the filing for a supervised reorganization in the short-term. The question is not only the amount asked by the bank, but other possible compensations.

In the dispute with BTG, the bank argues that the discussion should happen in arbitration and that there is an acceleration clause. The company has replied in court, saying that there are different agreements with the bank and that there would be no early settlement clause in the receivables.

In the operation, suppliers that normally sell on credit terms already demand cash payment, which is likely to complicate the retailer’s stock.

*By Maria Luíza Filgueiras — São Paulo

Source: Valor International

https://valorinternational.globo.com/