Americanas judicial recovery should be the 4th largest in history

The law firms Lara Martins Advogados and Mingrone e Brandariz, specialized in judicial recovery, informed the Sheet the ranking of the largest operations of this nature in Brazil to date, based on the companies’ debt when they filed the application.

According to the survey, Americanas should rank fourth among the largest judicial recovery operations ever carried out in Brazil, considering the company’s confessed debt of R$ 40 billion.

Before her are Odebrecht (R$ 80 billion), Oi (R$ 65 billion) and Samarco (R$ 55 billion). After Americanas, Sete Brasil (R$ 19 billion) and OGX (R$ 12.3 billion) appear on the list.

Oi’s judicial reorganization, concluded on December 14 of last year, is considered the largest in the country, with the exception of Odebrecht, which also dragged to the same ranking other companies denounced in the Lava Jato operation of the Federal Police (Sete Brasil and OGX) .

Samarco, controlled by Vale and BHP Billiton, was responsible for the biggest environmental tragedy in the country, in November 2015, with the rupture of the Bento Rodrigues dam (MG).

This Tuesday (17), Americanas announced the arrival of Camille Loyo Faria as the company’s financial and investor relations director, who should begin her term on February 1st. Camille is a former director of finance and investor relations at TIM and held the same position at Oi between November 2019 and August 2021, when the company was in judicial recovery.

After the market was taken by surprise last week, with the announcement by the former president of Americanas, Sergio Rial, that he had found “inconsistencies” in the amount of R$ 20 billion in the company’s balance sheet, the company surprised once again when indicating, two days later, that its debts reached R$ 40 billion.

“The necessary accounting adjustments to be made in due course by Americanas to correct the detected inconsistencies may result in non-compliance with the ‘financial covenants’ provided for in several of the contracts entered into with its financial creditors, including foreign ones, allowing them to declare the early and immediate maturity of approximately , BRL 40 billion in debt”, informed the company in the request for urgent precautionary relief, granted by the 4th Business Court of Rio de Janeiro on the last 13th.

The number corresponds to the sum of the R$ 20 billion exposed by the former president of Americanas and the company’s gross debt, which in September 2022, the last available data, was almost R$ 20 billion. “Financial covenants” are obligations applied to borrowers.

Obtaining an injunction in record time can lead to interpretations

according to Sheet anticipated this Tuesday (17), the company is preparing to file for bankruptcy in the coming days. At first, the value would be R$ 20 billion. But the value can change, since it depends on the negotiation with creditors and the judge’s assessment of the request for judicial recovery.

“The request for judicial recovery is made based on the value that the company initially understands as subject to the operation, based on what we call the first list of creditors”, said Filipe Denki, director of the Commission for Business Recovery and Bankruptcy of the Federal Council of OAB and partner of Lara Martins Advogados, responsible for the survey. Denki worked on Oi and Samarco’s judicial reorganizations, defending creditors.

“This first list may undergo alterations after the credit verification carried out by the judicial administrator, who is in charge of disclosing the second list of creditors”, says the expert. “At the end, the trustee also makes a last check to consolidate the general picture of creditors”. This consolidation is important, he explains, to start paying off debts.

But creditors can appeal for a long time against Americanas, judging by Oi’s lawsuit, one of the longest in history, lasting six years (2016 to 2022). “Even after the end of Oi’s judicial reorganization, there are credit challenge actions in court”, says Denki.

The specialist points out that the judicial recovery serves for the company to continue operating and honor its commitments. “What can change is a reduction in offers and inventory”, he says, who does not doubt that the case will yield many legal consequences – also considering the performance of audits by the retailer, PwC, which did not identify the “accounting inconsistencies”.

“The very obtaining of an injunction in record time, obtained at first in secrecy of Justice, in a case with so many involved, gives rise to several interpretations.”

On the radar, layoffs, store closures and asset sales

In the opinion of André Pimentel, a partner at Performa Partners, the injunction obtained by the company –which protects Americanas from any charge for a period of 30 days– already has all the characteristics of a judicial recovery. “In case the judicial recovery is requested by the company, this deadline would already be included in the process”, he says.

“The company will be able to continue paying suppliers, for example, and not pay banks. In judicial recovery, all credits prior to the request would be suspended”, he says.

According to the consultant –who worked on the restructuring of Americanas in the late 1990s, when he was at Galeazzi & Associados and, before that, worked at PwC, Americanas’ current auditor–, the company has already begun to be impacted as if it had asked a court-supervised recovery.

“I have reports of suppliers that are withholding new supplies, and certainly the banks have already suspended supplier advance operations, which are essential for maintaining the business of small and medium-sized companies”, he says.

For Pimentel, with the judicial recovery should come the reduction of the operation in the short term, with the closure of physical stores, distribution centers and layoffs.

“Another impact should be the probable placement of the group’s assets for sale as a way of obtaining capital, such as Hortifruti and Uni.co, which are operations that still maintain high independence”, he says. In the consultant’s opinion, the partnership between Americanas and Vibra, in the exploration of small retail stores, inside and outside gas stations, through the Local and BR Mania store chains, should also enter the market’s radar.