Brazil’s Corporate Friday: Buybacks, Payouts and a Ratings Upgrade
Key Facts
Friday brought an unusually dense set of Brazilian corporate filings, and almost all of them were about balance sheets rather than trading. Four companies moved capital, one left bankruptcy protection with an upgrade, and one is still trying to avoid entering it.
The largest single number came from Itaú Unibanco. The bank is repurchasing R$11 billion, about US$2.1 billion, in subordinated Tier 2 financial notes.
The Banks
Itaú’s repurchase is exercisable on 21 September and again on 21 October. Tier 2 notes count towards regulatory capital, so retiring them is a statement about how much capital the bank believes it needs.
Casas Bahia went the other way, raising rather than retiring. It approved its hundredth and hundred-and-first commercial note issues, worth R$240.8 million and R$127.2 million, or R$368.2 million in total and roughly US$71 million.
A separate item has been widely misreported this week. The retailer’s debenture holders met on 14 September to ratify the effects of the automatic early maturity triggered by its bankruptcy-protection filing.
That was a creditors’ meeting about acceleration, not a board meeting to ratify the filing itself. The distinction matters to anyone reading the company’s credit position.
The Payouts
TIM approved R$515 million in interest on capital on Wednesday, worth about US$100 million. It also cancelled 13.2 million treasury shares.
Cemig declared R$200 million in interest on capital on Friday, roughly US$39 million. Payment comes in two instalments falling due in June and December 2027.
That figure has been widely reported as an addition to a larger joint announcement with B3. It is not.
B3 separately declared R$1.128 billion, about US$219 million, on the same day, and outlets summed the two. Cemig’s share of that combined figure is its own smaller declaration, not an extra amount on top.
Light Leaves Bankruptcy Protection
S&P raised the national-scale issuer rating of Light SESA on Friday. It moved from D, meaning default, to brBB+.
The upgrade follows the formal conclusion of Light’s bankruptcy protection. The supervision period ran from June 2024 to June 2026, and the Rio court has decreed its termination.
Safra initiated coverage of the shares after the exit. Fitch had already raised the company to BB on the Brazilian national scale in August.
Light is the electricity distributor for the city of Rio de Janeiro. Its restructuring has been one of the longest-running corporate cases in the Brazilian power sector.
Braskem and the Weight of Its Debt
Braskem’s difficulties deepened rather than turned this week. Its net debt stands at 14.7 times earnings before interest, tax, depreciation and amortisation.
The comparison is the uncomfortable part. Ineos runs at 5.7 times, Dow at 5.2 and LyondellBasell at 3.8.
That is close to three times the leverage of its nearest listed rival. Creditors rejected the company’s debt restructuring plan this week and are pressing shareholders, including Petrobras, for a capital injection.
The share move itself was modest on Friday, with the stock down about 1.3%. The shares have lost roughly half their value over twelve months.
The Rest of the Board
Copel’s board approved delisting its shares from the Latibex market in Madrid. The company remains listed on B3 in São Paulo and on the New York Stock Exchange, and frames the move as corporate simplification.
Assaí bought eighteen petrol stations from a convenience operator, all at its São Paulo state stores. The deal is worth up to about R$80 million, roughly US$16 million.
A widely circulated claim that Assaí approved a debenture buyback on Friday is misdated. That R$200 million programme, about US$39 million, was approved in April and runs to 29 October.
Goldman Sachs published a note on MBRF arguing the shares could rise as much as 23% on expected Selic cuts alone through 2027. Brazil’s policy rate was cut to 13.75% on Wednesday.
Telecoms and Fuel
The telecommunications regulator extended a regulatory sandbox authorisation for Telefônica Brasil, which trades as Vivo, to work with Starlink on direct-to-cell service. The window now runs to 22 April 2029 rather than expiring next month.
This is an experimental authorisation rather than approval of a definitive commercial service. Vivo may sell within it, but on secondary status, capped at 100 watts, and must stop transmitting if it causes interference.
Petrobras raised its diesel reference price by R$1 a litre, about nineteen US cents, this week. A finance ministry order created a matching subsidy so distributors pay the same.
The gap to international prices narrowed from about 36% to roughly 22%. Both Itaú BBA and BTG Pactual say further increases will be needed.
Frequently Asked Questions
What is Itaú repurchasing?
R$11 billion, about US$2.1 billion, in subordinated Tier 2 financial notes. The repurchase is exercisable on 21 September and 21 October 2026.
How much did TIM pay out?
R$515 million, roughly US$100 million, in interest on capital, approved on 17 September. It also cancelled 13.2 million treasury shares.
Did Cemig announce a billion-real payout?
No. Cemig declared R$200 million, about US$39 million, and B3 separately declared R$1.128 billion or some US$219 million on the same day. Outlets summed the two, but Cemig’s own figure is the smaller one.
Why was Light upgraded?
S&P raised Light SESA from D to brBB+ on 18 September after the company formally concluded its bankruptcy protection. Fitch had already upgraded it in August.
How leveraged is Braskem?
Net debt stands at 14.7 times earnings, against 5.7 times at Ineos, 5.2 at Dow and 3.8 at LyondellBasell. Creditors rejected its restructuring plan this week.
What did Anatel approve for Starlink?
It extended an existing regulatory sandbox authorisation for Vivo to work with Starlink on direct-to-cell service, to 22 April 2029. It is experimental rather than a definitive commercial licence.
Sources: InfoMoney on the Itaú note repurchase, Teletime on TIM’s interest on capital and share cancellation, BP Money on the B3 and Cemig payouts, Money Times on the S&P upgrade for Light SESA, Cenário Energia on the Copel delisting, ADVFN on the Casas Bahia commercial notes, Tecnoblog on the Anatel sandbox extension
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