January 29, 2023

Americana hires Moro’s former employer to restructure

Americana hired the consulting firm A&M (Alvarez & Marsal).

After the millionaire hole in the company, A&M will work on restructuring the company.

Among the consulting firm’s staff were a former minister, a former judge and an elected senator Sergio Moro (UniĆ£o Brasil-PR), which I worked for her until 2021.

In a statement to the market, Americana said that Alvarez and Marsal will enter into an operation judicial recovery From the company. The agreement was also confirmed by the consulting firm TO UOL.

A&M was responsible for the judicial recovery of Odebrecht, the target of Operation Lava Jato.

The company’s goal is to ensure that the executive team has all the support and reference tools in the market to achieve the strategic objectives of the business.
An advertisement from Americana

The statement also confirmed that Americana will keep shareholders and the market informed on the judicial recovery.

On Thursday, Rio’s Fourth Business Court granted Americana’s request for injunctive relief. The company stated in its application Debt of R$43 billion out of a total of 16,300 creditors.

As of the third quarter of 2022 (data from the latest financial statement), before the hole in Americanas balance sheets was revealed, the company reported total debt of R$19.3 billion.

Understand the American crisis

  • Judicial recovery is a legal tool that aims to give a company a way to recover from a difficult financial situation and avoid bankruptcy.
  • The company’s former CEO, Sergio Real, remained in office for only ten days and resigned after revealing a deficit of 20 billion Brazilian riyals in the company.
  • On the 13th, Americana obtained an injunction against creditors and the court gave the company 30 days to decide whether or not to file a judicial recovery request, citing a potential debt of R$40 billion.
  • Standard & Poor’s downgraded Americana’s credit risk rating to “D” from default.
  • The banks were able to reverse the initial decision, and due to the lack of progress in negotiations with creditors, Americana decided on the path of judicial recovery.
  • BTG Pactual, Bradesco and Santander Brasil are among the most exposed to retail debt.
  • CVM has opened investigations to investigate the accounting scandal. A group of minority shareholders also sued for damages and said the company had “manipulated facts and data”.
  • To justify the injunctive recovery request, the company argued that without protection against creditors there is a risk of “utter annihilation of the group’s cash flow”, which would prevent payment to suppliers and employees.
  • The company claims to hold more than 100,000 direct and indirect jobs, and brings together 3,600 establishments in the country.