Americanas’s reorganization plan enters final stageCreditors will be paid after approval of capital increase is ratified, expected this week
07/22/2024
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Americanas: fraud is now estimated at R$25bn — Foto: Domingos Peixoto/Agência O Globo
Americanas’s court-supervised reorganization plan reaches its final stage this week, a year and a half after negotiations between shareholders and creditors began. The outcome includes a series of almost simultaneous steps for paying off debts, in a design drawn up so that the parties’ commitment not to litigate becomes definitively valid.
Retail chain Americanas went into court-supervised reorganization on January 19, 2023, eight days after the revelation of an accounting fraud now estimated at R$25 billion.
The first event in this step-by-step process is the approval of the company’s capital increase, scheduled to take place on Thursday. The primary shareholders—Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles—will make a contribution of R$12 billion, which includes new money and the conversion of loans made to the retailer under the debtor-in-possession (DIP) modality, used for companies in recovery. On the other hand, R$12 billion will be converted into debts to creditor banks, which will make them shareholders.
The bill for the trio of businessmen will not be distributed equally between them. Mr. Sicupira will foot most of the bill—more than R$7 billion— since Americanas has always been a business closely monitored by him, who even sits on the board of directors.
Although it is very likely that the approval will take place on the 25th, this is an estimate. With the plan approved and the adjustments made to it last week, it is possible that the document will be presented by the court to the Prosecution Service before this step, which could push the date further forward.
Once approval has been granted, the settlement begins. First, the new shares are issued and the debts converted. Next, R$2.04 billion will be paid to creditors who sold their debts at discounts of up to 73% in a reverse auction held in April.
After that, Americanas will issue debentures worth R$1.875 billion, with series in reais and dollars. The bonds will mature in five years, have a grace period of 24 months, and will be used to exchange old debts.
The last stage is the so-called downpayment, i.e. the payment in cash of the remaining debt at a discount. At this stage, the disbursement is expected to be R$6.7 billion. This money will come directly from the capital increase and will not even pass through the company’s cash flow. Labor debts and debts to suppliers have already been paid in the first half of the year, with the company’s own money.
All the remaining payment stages will be made concurrently. According to sources with knowledge of the matter consulted by Valor, it is unlikely that everything will be paid in a single day, but the idea is to reduce time lags to almost zero. This is important because it eliminates the risks in the agreement between creditors and shareholders not to litigate.
In order to close the company’s court-ordered recovery agreement at the end of last year, both sides agreed they would not take legal action against each other. Until then, some banks had gone to court to sue shareholders and directors if there was any sign that they had participated in or knew about the fraud. The agreement does not eliminate, but drastically reduces the chances of eventual liability.
So far, both the retailer and investigations by the Prosecution Service and the Federal Police maintain that the scheme to cook the books carried out by the former management, without the board’s knowledge. The investigations are still ongoing.
Last week, Americanas informed it had received the report of the independent committee it hired to investigate the problems. The document has not yet been released, but the retailer has signaled that the work corroborates the thesis of fraud committed by former directors.
Americanas’ recovery process involves the restructuring of R$50 billion in debts, including commitments between companies in the group itself.
The bases of the agreement were initially agreed with the main creditor banks—Bradesco, Itaú Unibanco, Santander, BTG Pactual, and Safra—and then extended to the others.
A team of lawyers from all sides worked on the operation. Senior executives from the banks and, at times, the CEOs of these institutions were involved in the negotiations. The Rothschild investment bank advised Americanas. CFO Camille Loyo, was the company’s main interface with the creditors. Roberto Thompson, a partner at Lemann, Telles and Sicupira, was the negotiator on behalf of the primary shareholders. Pinheiro Neto law firm was the central point for talks between the banks and the company.
*Por Talita Moreira — São Paulo
Source: Valor International