Brazil: Americanas retailer creditors seek US$2.3 billion injection

Creditors of Americanas SA, including some banks and bondholders, are willing to cut a deal with the struggling retailer’s billionaire shareholders if they agree to inject US$2.3 billion into the company, people familiar with the matter said.

Negotiations are progressing as creditors evaluate whether to accept a debt-for-equity swap proposed by Americanas, said the people, who asked not to be identified because the discussions are private.

The billionaires – Jorge Paulo Lemann, Carlos Sicupira, and Marcel Telles – are Americanas’ largest shareholders and had offered a payment of R$10 billion (US$1.9 billion).

They declined to comment.

Americanas has offered up to R$18 billion in shares and convertibles in exchange for debt.

The Brazilian retailer went into crisis earlier this year amid revelations of “accounting inconsistencies” of R$20 billion that artificially boosted profits over a decade and cut reported liabilities in half. It filed for bankruptcy with over R$42.5 billion in debt in January.

Lenders, including Banco BTG Pactual SA and Banco Bradesco SA, called for the three billionaires to be held accountable.

Lemann, Sicupira, and Telles said their investments in the firm exceeded payments by about R$1.6 billion over the past 10 years, and creditors should share the burden, people familiar with the matter said earlier.

Americanas did not immediately respond to an e-mail seeking comment.

The people said the company also offers a debt buyback in a reverse auction.

Some Brazilian banks would not participate because the company said the minimum discount on the face value of the debt would be 60%, and bankers still expect to recover more, the people said.

With information from Bloomberg

More: Brazil news in English, every day from The Rio Times.