Americanas seeks U.S. court recognition of Brazilian proceedings

By Sarah Lizee

Olympia, Wash., Jan. 27 – Americanas SA made a Chapter 15 filing Wednesday in the U.S. Bankruptcy Court for the Southern District of New York to gain recognition of its judicial reorganization in Brazil, according to court documents.

As previously reported, the company recently announced that it applied for the judicial reorganization after finding itself at a “dead end” with nearly R$43 billion in debt.

The debtors are required to submit a plan of reorganization within 60 days. If Americanas doesn’t file a plan within that time, the judicial reorganization may be converted into a liquidation, unless creditors vote to allow the submission of an alternative plan.

On Jan. 11, the company had announced substantial inconsistencies in its financial statements. The inconsistencies are estimated around R$20 billion as of Sept. 30.

Some of Americanas’ creditors immediately took action against the company, and the parties were not able to negotiate.

Americanas said that even though it took measures to “reduce the impact” of its announcement, in less than a week, it lost almost 80% of its market value, with its shares dropping to R$1.80 from R$12.00 before the announcement went out.

On Jan. 13, the company received injunctive relief from the Rio de Janeiro court, which allowed the company to not pay off its debt through the 30 following days.

Americanas received downgrades from rating agencies S&P Global Ratings, Moody’s Investors Service and Fitch Ratings, which made its situation “even worse” coupled with the fall in value of its shares, the company said.

After the downgrades, banks refused to advance credit card receivables, which Americanas has historically used for working capital. The company said this drained over R$3 billion of its cash.

The company said it trusts the judicial reorganization will allow it to restructure its debt and allow it to continue to carry out its activities.

Americanas is a retail chain based in Rio de Janeiro. The Chapter 15 case number is 23-10092.

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