Brazilian Banks Fight Foreign Bondholders Over Ambipar in US Court

Markets · Corporates

The Ambipar restructuring has turned into a cross-border tug of war, with Brazilian banks fighting foreign bondholders in a Houston court over who controls one of the country’s biggest corporate workouts.

Why the Ambipar restructuring moved to a US court

A fight over one of Brazil’s largest corporate workouts has crossed the border into a Texas courtroom. A group of Brazilian banks has gone to a Houston court to try to block the restructuring plan of Ambipar, a Brazilian environmental-services group buried in debt.

Bradesco, Banco do Brasil and the local arm of Japan’s Sumitomo want to be admitted to Ambipar’s US bankruptcy case, known as Chapter 11. Their goal is to stop a deal shaped around the holders of bonds the company issued abroad.

Chapter 11 is the American version of court protection that lets a company keep running while it reorganises its debts. It is roughly the US equivalent of Brazil’s own judicial-recovery process, which Ambipar entered at the same time.

The company chose Houston for a reason. Its US subsidiaries sit there, including Ambipar Response, the emergency-response unit that the restructuring plan would hand directly to the foreign creditors.

How the debt splits the creditors

The arithmetic explains the anger. Ambipar carries roughly 10 and a half billion reais of debt, and the foreign bondholders hold the largest single slice, estimated at about five and a half billion reais.

Holders of debentures, a common Brazilian corporate bond, account for around three billion reais. The banks come next at about two billion reais, leaving them outnumbered in any vote.

Because the bondholders control more than half the debt, they have the votes to approve almost any plan at the creditors’ meeting, which is due to be called within a month. That is exactly what worries the banks and the debenture investors.

There is one player straddling both camps. BTG Pactual, the Brazilian investment bank, is reported to have bought around eight hundred million reais of Ambipar bonds and local debt, making it one of the group’s largest single creditors.

What the banks say went wrong

The banks argue they were shut out. They say Ambipar failed to notify them when it opened the US case, and that the deadline to join it passed in February before they could act.

So they are asking the Houston judge to let them enter late. Their aim is to win the right to vote on the plan and to share in the assets that may be handed to creditors.

Their legal hook is a feature of the Brazilian case. Because the Rio de Janeiro recovery treats all the group’s companies as a single economic unit, the banks contend they also have a claim on the debts pulled into the US proceeding.

Caixa, the state-owned savings bank, has joined the push from a different angle. It is pressing its own claim as the holder of about one and three-quarter billion reais of Ambipar debentures.

A collapse built on debt-fuelled growth

Ambipar was once a market darling, a fast-growing environmental and emergency-services group that expanded across the Americas and beyond. It bought roughly seventy companies after its 2020 stock-market listing, funded largely with borrowed money.

That strategy unravelled as interest rates rose and confidence in its accounts cracked. The group sought court protection in October 2025, after disclosing irregularities in derivatives and questions over billions of reais that appeared to have vanished from its cash.

Founder Tércio Borlenghi Junior built the company through aggressive dealmaking, and its emergency-response business handles chemical and pollution incidents across several countries. That international footprint is now the reason two courts must coordinate.

Why it matters for investors

For foreign investors, the case is a live test of how Brazilian restructurings treat domestic and overseas creditors when a company has assets in both places. The fear, voiced by the banks, is that a cross-border deal can quietly push local lenders to the back of the queue.

The outcome will signal how much protection a bondholder really has. If the plan stands, foreign creditors walk away with prized operating businesses; if the banks get in, the near-finished deal has to be reopened.

There is a wider lesson for emerging-market credit too. Ambipar shows how fast a debt-funded growth story can turn, and how the fine print on where a company files can decide who actually gets paid.

For now the decision rests with the Houston judge on June 22. A ruling for the banks would turn what looked like a formality into a contested fight; a ruling against them would clear the bondholders’ path to control.

Frequently Asked Questions

What is the Ambipar restructuring fight about?

Brazilian banks are asking a Houston court to block a plan that would hand Ambipar‘s US subsidiaries, including its emergency-response arm, to foreign bondholders. They say the deal was built without them and pushes local creditors to the back of the line.

Who are the main creditors?

Foreign bondholders hold the biggest share, about five and a half billion reais of roughly ten and a half billion in total debt. Debenture investors hold around three billion and banks about two billion, while BTG Pactual sits on both sides after buying around eight hundred million reais of debt.

What happens next?

A Houston judge rules on the banks’ request to join the case on June 22. A creditors’ meeting to vote on the plan is expected within a month, and the bondholders currently have enough votes to approve it.

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