Retail giant Americanas laid off almost 8,000 since its accounting scandal broke

Brazilian retailer Americanas has laid off 7,993 people since its accounting scandal came to light and the company filed for bankruptcy protection in January. Americanas end-of-July weekly judicial trustees report shows the company counted 35,130 employees — in January, there were 43,123.

The closure of five more stores is also detailed in the report, bringing to 60 the number of units closed since the beginning of the year. The company still has 1,820 stores throughout Brazil.

In a note to Bloomberg Línea, the company stressed that the number of layoffs is 20 percent below that of the same period last year and that it continues to work “with a focus on maintaining its operations and increasing its efficiency.”

Last week, Americanas postponed publishing Q4 2022 and Q1 2023 earning reports. New external auditors are still reviewing the company’s financial statements, since PwC stepped down from the role in June.

The retail giant filed for bankruptcy protection at a Rio de Janeiro business court in January, acknowledging nearly BRL 43 billion in short-term debt. Since then, the company has tried to negotiate a way out with more than 9,400 creditors. 

The latest announced plan includes a BRL 10 billion capital injection from reference shareholders — Jorge Paulo Lemann, Marcel Telles, and Carlos Alberto Sicupira, who own about 30 percent of Americanas — and two potential additional capital increases of up to BRL 1 billion each.

The amount to be injected by reference shareholders includes emergency financing of BRL 2 billion, of which Americanas has already used half.

In mid-June, the company released an updated list of creditors and confirmed that it had forwarded its recovery plan proposal to the court. Creditors were allowed 30 days to comment on the proposal. Before that, however, in early June, three had already questioned the Americanas plan. 

The proposal will eventually have to be voted on at an assembly with all creditors. The biggest obstacle to a consensus has been the banks. As the biggest creditors, they would be willing to convert BRL 10 billion of debt into equity, but there are still rough edges to be worked out in this negotiation. Banks are pushing for a higher capital injection from reference shareholders, of BRL 12 billion. 

Last week, Bradesco CEO Octavio de Lazari Júnior told journalists and analysts that negotiations with the retailer were evolving and could conclude in September. Bradesco is the company’s biggest creditor, with a BRL 5.2 billion debt, followed by Itaú (BRL 4.3 billion) and Santander (BRL 3.6 billion).

Also in June, Americanas admitted that its executives defrauded balance sheets for an extended period of time. The admission came as a result of preliminary findings of an independent investigation into the company’s accounting woes and amid a congressional inquiry that, among other investigation fronts, was the fastest moving towards uncovering what really happened. This Tuesday, however, members of Congress failed to advance the case. Of two former directors accused by Americanas of defrauding the company’s balance sheets, one (Marcio Cruz Meirelles) did not appear and the other (José Timotheo de Barros) remained silent, not answering any legislator questions.

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