Americanas Creditors Approve Restructuring Plan to Cut $10 Billion Debt
Americanas Creditors Approve Restructuring Plan
Brazilian retailer Americanas received approval for a restructuring plan on Tuesday. The plan includes a $2.5 billion capital injection by main shareholders and a divestment agenda aimed at reducing its approximately $10.28 billion debt. The approval marks a significant step for Americanas, pending final ratification by a Brazilian judge.
Americanas’ Rocky Path to Recovery
Americanas, a nearly century-old company backed by the trio of billionaires who founded 3G Capital, faced challenges earlier this year after discovering $4 billion of accounting inconsistencies. The restructuring plan is seen as a critical path towards the company’s recovery.
Key Components of the Restructuring Plan
The approved plan outlines a two-year period for implementation, involving a capital injection of 12 billion reais from the 3G trio and a 12 billion-real debt-for-equity swap. More than 90% of creditors have endorsed the plan after a lengthy online meeting. Former workers and small companies, representing less than 1% of Americanas’ debt, did not vote on the plan, as it did not alter their payment conditions.
Stakeholder Support and Planned Injections
Americanas has garnered support from major creditors and has received a capital injection of 1.5 billion reais from the 3G trio, with an additional 3.5 billion reais to be provided shortly after court approval. The trio, considered Americanas’ reference shareholders, have a significant stake in the firm.
Divestment Strategy
The restructuring involves Americanas’ duty to sell off certain assets, including a fruits and vegetables retailer chain and its stake in a company owning fashion, accessories, gifts, and design products. The plan also includes the potential sale of Americanas’ digital operations and its fintech Ame, although these are not mandatory.
Creditors’ Decision and Market Impact
A majority of creditors rejected postponing the voting and the stock prices of Americanas closed 5.3% lower on Tuesday, before the plan’s approval. Despite its challenges, Americanas has shown resilience, with stock prices gaining ground from previous lows.
($1 = 4.8637 reais)
