Brazil’s Americanas considering filing for bankruptcy


Article content

SAO PAULO — Brazilian retailer Americanas SA said on Thursday it is considering filing for bankruptcy after uncovering nearly $4 billion in accounting inconsistencies last week.

“Although it has not yet been decided, the management is working with the possibility of in the next few days or potentially in the next few hours approving filing, on an emergency basis, a request for bankruptcy protection,” Americanas said in a securities filing.

Article content

Americanas added that the current cash position stands at 800 million reais ($154.25 million) after a court decision allowed a lender to withhold money from the firm.

Article content

Lender BTG Pactual obtained on Wednesday a court decision overturning part of Americanas’ protection from creditors, a move the retailer said would “harm its viability.”

Americanas’ stores are ubiquitous at Brazilian shopping malls. The company’s e-commerce unit, which traded as a separate company before a recent restructuring, is one of the country’s top online retailers.

Last week, chief executive Sergio Rial resigned less than two weeks after taking the job citing the discovery of “accounting inconsistencies” totaling 20 billion reais ($3.9 billion).

Rial, the former head of Banco Santander’s Brazilian arm , attributed the inconsistencies to differences in accounting for the financial cost of bank loans and debt with suppliers.

Article content

Chief Financial Officer Andre Covre, who had just joined Americanas as well, also left the firm, which has three Brazilian billionaires who founded 3G Capital – Jorge Paulo Lemann, Carlos Alberto Sicupira and Marcel Telles – as reference shareholders.

Americanas said it was unable to access part of its cash position on Wednesday “without explanation by the bank where the proceeds are deposited,” adding it would appeal the court decision.

It added the decision “harms its efforts to find a short-term solution with its creditors.” Lender Banco Bradesco SA also said it had asked a Rio de Janeiro court to only allow Americanas to withdraw funds from the bank with prior approval. ($1 = 5.1863 reais) (Reporting by Gabriel Araujo; Editing by Toby Chopra and Chizu Nomiyama)


Source link

Comments are closed.