AgroGalaxy Secures Judicial Recovery: A Lifeline for the Agricultural Giant
The Goiás Court has approved AgroGalaxy’s judicial recovery request, offering a reprieve to the struggling agricultural group.
Judge Alessandra Gontijo do Amaral granted the petition on Tuesday, October 1, 2024, accepting the company’s arguments for judicial protection.
AgroGalaxy Participações and twelve affiliated companies filed the request, citing the need to maintain operations. The group’s liquid debt surged from R$786.9 ($143) million in June 2021 to R$1.5 billion in June 2024.
Annual interest payments skyrocketed from R$104.0 million to R$623.0 million during the same period. The company faced a severe cash flow crisis, with approximately R$1.1 billion in overdue payments to suppliers.
AgroGalaxy argued that without judicial intervention, its survival would be impossible. The court’s decision suspends debt execution and releases funds held in the group’s accounts.
Judge Amaral prohibited the retention of receivables and grains from operations with several banks. These assets were deemed essential for maintaining business activities and meeting current obligations.
The ruling addresses attempts by creditors to limit the scope of the judicial recovery. They dismissed questions about the Goiás court’s jurisdiction, despite claims of a recent headquarters relocation.
In addition, the decision suspends all actions against AgroGalaxy for 180 days, including measures that could deprive the company of its assets.
AgroGalaxy now has 60 days to present a judicial recovery plan or face bankruptcy proceedings. The court appointed two administrators, Miguel Ângelo Sampaio Cançado and Aluízui Craveiro Ramos, to oversee the process.
The administrators will work jointly, considering the company’s economic significance and market relevance. AgroGalaxy’s operations span 14 states and impact over 30,000 agents.
In short, the judicial recovery process acknowledges the group’s importance to exports, GDP contribution, and job creation.
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