Deal with creditors provides lifeline to Brazilian retail giant Americanas

Americanas, a floundering Brazilian retailer, published on Monday a securities filing to inform markets that it has signed a binding agreement to support its judicial reorganization plan with creditors who hold more than 35 percent of its debt. 

The company will file the amendment to the judicial recovery plan with a business court in Rio de Janeiro — the same venue before which it filed for bankruptcy protection in January this year. 

At the start of the year, Americanas informed investors that it had found “inconsistencies” in its books. More than mere rounding errors, these “inconsistencies” amounted to nearly BRL 43 billion in short-term debts. 

According to the company, major creditors have also shown interest in supporting its judicial recovery plan. They are expected to join the same binding agreement in the coming days, before the creditors’ meeting scheduled for December 19, in a first call, and January 22, 2024, in a second call. Americanas has more than 9,400 creditors.

A notable exception was Safra — a major investment bank that asked for access to the documents that Americanas used for its updated financial reports before accepting any deal with the retailer.

The agreement signed this morning includes changes to the previously presented recovery plan, mainly regarding the company’s capital increase. 

In addition to the BRL 12 billion (USD 2.5 billion) to be injected by the reference shareholders, Americanas also managed to negotiate the conversion of debt with several of its largest creditors (banks) into shares, allowing them to participate — as debtor-in-possession (DIP) — in an additional...