Fight between Americans and creditors: the answers that could be worth billions

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Americanas’ billionaire shortfall, which became public last week, triggered a crisis in the retail giant’s business.

In a statement released to the market, the company detected an “accounting inconsistency” in the order of BRL 20 billion in the balance sheets, which, after a more detailed analysis, could result in a debt of BRL 40 billion.

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The Justice of Rio de Janeiro accepted the request for a judicial precautionary measure, a process that prevents the attachment or blocking of assets by creditors until a possible judicial recovery process is opened by Americanas, with a period of up to 30 calendar days.

In response, banks and creditors appealed the decision, with BTG Pactual leading the queue with a petition — already denied by the Court — against the blocking of debt execution. Little is known, however, how far this “big fish” fight will go.

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For every question that is tried to find an answer, other doubts arise — which puts Americanas in an even more delicate situation. Check out some of the main questions surrounding the retailer’s crisis.

Will Americanas be able to handle the debt?

Before the stage of the carriage, the risk rating agency S&P Global was the first among the big three in the industry to downgrade Americanas’ rating to “default”. The announcement was made last Monday (16), when it declared that the retailer is in a situation of non-payment, the so-called “default”.

In the decision, S&P mentions that the measure is the result of the decision of the Justice of Rio. “In our view, although the guardianship still does not represent a judicial recovery, it is an initial step towards it. In addition, the company announced today the hiring of Rothschild to renegotiate all its debt”.

The other two major risk rating agencies, Fitch Ratings and Moody’s, also downgraded the giant retailer’s rating, one notch above the default situation. The expectation is that they will follow the same path as S&P Global.

Also on Monday, the company failed to pay interest on the 17th issue of debentures, which involve a debt of BRL 2 billion, with resources to reinforce the company’s cash and to cover debts maturing in 2022 and 2023.

“According to the deed of the 17th issue of debentures, in its clause 4.2.2, there is the forecast for the payment of interest on this date (01/16/2023), which was not settled, making the asset in default”, states the communication received by Americanas.

The company responded by citing that the decision of the 4th Business Court of the Court of Justice of Rio de Janeiro allows default on the title.

What is the size of the banks’ exposure?

BTG Pactual’s decision to appeal the injunction that protects Americanas for 30 days is an example of how the bank and other financial institutions are exposed to the risk of a billionaire default by the retailer.

BTG leads this queue for being among the hardest hit by the company’s spills. The exposure, as first informed by the economy analyst at CNN Thais Herédia, is large, although not apparent when looking at the investment bank’s loan portfolio.

The question is what comes after the injunction. Based on previous cases, analysts at JPMorgan estimate that banks should start accruing around 30% of their exposure to Americanas, which may eventually increase depending on the outcome of any request for judicial recovery.

For banks like BTG, it is an account that can weigh – and a lot.

How is the debt of Americanas?

The absence of details about the retailer’s debt raises a series of questions that, until now, remain unanswered.

What is, after all, the size of the debt? Can the BRL 20 billion shortfall actually generate a debt of BRL 40 billion? How will this debt be paid? What is the type of debt? Is it short term or long term? And at what interest?

With the agenda of indicators emptied, the Americanas accounting scandal, already pointed out as the biggest in the country, could stir up more turmoil in the Brazilian capital market — and culminate in a battle of “great people”, with billionaires like Jorge Paulo Lemann , Marcel Telles and Carlos Alberto Sicupira, from the 3G group, in the midst of the imbroglio.

The company’s shares collapsed again on Monday, when they fell 38.41%, to R$ 1.94. In the trading session prior to the announcement about the fiscal problems, which resulted in the resignation of the newly sworn-in chief executive and financial vice-president, Americanas shares were worth R$12.

*With information from Thais Herédia and Fernando Nakagawa, from CNN

Source: CNN Brasil

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