Brazil’s Americanas gets OK for restructuring plan, eyes $10 billion debt cut

SAO PAULO (Reuters) -Creditors of Brazilian retailer Americanas approved a restructuring plan on Tuesday, which features a $2.5 billion capital injection by main shareholders and a divestment agenda aimed to cut its around 50 billion reais ($10.28 billion) debt.

Americanas, a nearly century-old company backed by the trio of billionaires who founded 3G Capital, filed for bankruptcy earlier this year after uncovering $4 billion of accounting inconsistencies.

The approval marks a key step for Americanas, but it still needs to be ratified by a Brazilian judge.

Court approval for the plan will kick-off a two-year period for the firm to implement it, which includes a capital injection of 12 billion reais from the 3G trio, as well as a 12 billion-real debt-for-equity swap.

The plan got more than 90% of creditors’ approval after a more than six-hour online meeting.

Creditors including former workers and small companies did not vote on the plan, however, as it did not alter their payment conditions, according to the bankruptcy’s trustee. Still, they represent less than 1% of Americanas’ debt.

The approval was already expected as Americanas has said it gathered support by majors creditors during last week.

From the about 12 billion reais capital raise by 3G trio – namely Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira – foreseen in the plan, 1.5 billion reais were already injected, while other 3.5 billion reais would be provided in up to 15 days after a court okays the plan.

The trio, which Americanas calls its reference shareholders, do not hold their stake in the firm through 3G Capital, their main investment vehicle.

The proposal approved by creditors also includes Americanas’ duty to sell fruits and vegetables retailer chain Natural da Terra and its 70% stake in Uni.Co, which own brands selling fashion, accessories, gifts and design products.

The selling of Americanas’ digital operations and its fintech Ame are other possibilities, but they are not mandatory by the plan.

During the meeting, the majority of creditors also rejected postponing the voting to January 22, as the company had presented new changes, mainly slightly wording adjustments, to the proposal.

Shares from Americanas closed 5.3% lower on Tuesday at 0.9 real each, before the plan’s approval, losing more than 90% this year, although they have gained some ground from record lows of 0.67 real they had hit in September.

($1 = 4.8637 reais)