巴西62.5%重组上市公司推债转股，Raízen债权人或持股80%

Raízen: R$65bn restructuring plan calls for part of debt to be converted into shares Victor Moriyama/Bloomberg The conversion of debt into equity has evolved from an occasional restructuring tool into a common feature of Brazilian public companies’ turnaround plans. Today, 62.5% of companies listed on B3 with court-supervised or out-of-court restructuring plans offer creditors the option to exchange part of their claims for shares, according to a survey by the Brazilian Observatory of Out-of-Court Restructuring (OBRE) commissioned by Valor. In practice, the mechanism allows banks, suppliers and other creditors to give up part of what they are owed in cash and instead become shareholders of the company, helping to shore up its balance sheet as part of the restructuring process. ‘Special sits’ surpass private equity funds in Brazil for first time Smaller firms fuel rise in court-supervised restructuring in Brazil Brazil bankruptcies rise as tax authorities gain new tool Juliana Biolchi Divulgação The survey examined a sample of 32 publicly traded companies with restructuring plans already submitted to the courts. Twenty of the plans provide for a debt-to-equity swap. The group includes Raízen and GPA, owner of Pão de Açúcar, which entered into out-of-court bankruptcy protection this year. The sample also highlights the spread of restructurings among listed companies. A year ago, about 20 publicly traded companies had restructuring cases before the courts, according to a survey published by Valor. The most prominent case is Raízen. Its reorganization plan calls for nearly half of its R$65 billion in debt to be converted into equity. If approved, creditors would end up holding about 80% of the company, triggering one of the biggest recent changes in the ownership structure of a Brazilian company undergoing financial restructuring. At GPA, the company has proposed exchanging part of its debt for debentures that can be converted into shares during specified periods. Oncoclínicas, one of the latest publicly traded companies to seek out-of-court reorganization, is also expected to offer a debt-to-equity swap in its restructuring plan. In another major case, Braskem, which is currently protected by a court-ordered injunction, could also turn to the tool. In the healthcare sector, Alliança, which recently filed for out-of-court bankruptcy protection, is also said to have included the option in its plans. The number of publicly traded companies undergoing court-supervised restructurings is likely to continue growing. Companies such as petrochemical producer Braskem have already obtained provisional rulings suspending creditor collection efforts, a measure that often precedes a filing for judicial or extrajudicial bankruptcy protection. The growing use of debt-to-equity swaps reflects both the increase in financial distress among companies and the development of Brazil’s restructuring market. In many cases, converting debt into equity has become one of the most effective ways to quickly reduce leverage without requiring a cash outlay, while allowing creditors to benefit if the company’s value subsequently increases. That does not mean creditors are universally willing to accept the trade-off. “Nearly two-thirds of the plans we analyzed offer the option of converting claims into equity, but in most cases the plan simply puts that option on the table. Deciding to take shares in a distressed company is not always straightforward because the return calculation is more complex than with alternatives such as bond issuance, debt rescheduling or a haircut. The decision requires a careful assessment of the company’s governance and its actual prospects for recovery,” said Juliana Biolchi, OBRE’s director. The expansion of debt-to-equity swap transactions also reflects changes in Brazilian law. According to Christopher Zibordi, a partner in the restructuring and insolvency practice at BMA Advogados, amendments to Brazil’s Bankruptcy and Reorganization Law approved in 2020 expressly established the possibility of converting claims into equity. Previously, the absence of a specific provision created legal uncertainty for creditors, particularly over concerns that becoming shareholders could expose them to liability for the company’s pre-existing obligations. “The overhaul made clear that converting debt into equity does not entail succession to the company’s previous liabilities. That provided legal certainty and helped more reorganization plans adopt this tool,” said Zibordi of BMA. As a side effect, a debt-to-equity swap can significantly reshape a company’s ownership structure in addition to reducing leverage. Depending on creditor participation, former lenders can become significant shareholders or even take control of companies undergoing restructuring. Thiago Dias Costa, a partner in the restructuring practice at Felsberg Advogados, said the broader use of the mechanism also reflects a shift in how creditors view corporate restructurings. Rather than simply seeking to recover part of their claims, many now see a debt-to-equity swap as an opportunity to participate in a company’s future upside. “Capitalization reduces a company’s liabilities without reducing its assets,” Costa said. By converting debt into equity, he said, a company can strengthen its financial structure without creating new payment obligations, improving its chances of recovery. The transaction typically dilutes existing shareholders, often prompting opposition from minority investors. Even so, Costa noted, less-leveraged companies tend to be worth more over the long term. Costa cautioned, however, that a debt-to-equity conversion alone does not guarantee a successful restructuring. To persuade creditors to give up their claims in exchange for shares, a plan must be accompanied by measures demonstrating that the company has a credible path to resume growth and create value. “You have to show creditors that the company is going to move forward and succeed,” he said. Zibordi of BMA said the transaction also requires careful attention to corporate governance. The issuance of new shares must respect existing shareholders’ preemptive rights and follow appropriate pricing criteria, reducing the risk of challenges over potentially improper dilution of minority shareholders. According to Costa, the market’s perception of the mechanism has also evolved. During the first major wave of court-supervised restructurings in 2008 and 2009, creditors strongly resisted converting debt into equity. As Brazil’s restructuring market matured and the number of cases increased, the option came to be seen as a way to preserve value in situations where a steep haircut or simply rescheduling the debt would leave little prospect of recovery. To encourage participation, Costa added, restructuring plans often offer economic incentives to creditors who opt for capitalization, such as discounts to the debt-to-equity swap price. At the same time, the terms must ensure equitable treatment among different classes of creditors and apply criteria deemed reasonable by the market. The spread of the mechanism is also fueling a new segment of the restructuring industry. Specialized asset managers are acquiring equity stakes created through debt-to-equity swaps. The trend is partly driven by banks’ preference not to hold these shares on their balance sheets, while some investment funds are not permitted under their mandates to own equity stakes. In practice, debt-to-equity conversions are no longer merely changing companies’ capital structures; they are also feeding a growing market of investors specializing in corporate restructurings. The companies cited in the article declined to comment.