Brazil Court Approves Grocer GPA’s US$915M Debt Plan

BRAZIL · MARKETS

A São Paulo judge has approved the out-of-court debt deal of the company behind Brazil’s Pão de Açúcar supermarkets.

A São Paulo court on Wednesday, 7 October, approved the debt restructuring of GPA, owner of Brazil’s Pão de Açúcar supermarkets. The GPA debt plan covers 4.568 billion reais (about US$915 million) of unsecured claims.

Brazil’s out-of-court restructuring, or recuperação extrajudicial, works much like a prepackaged Chapter 11 case in the United States. GPA once traded on the New York Stock Exchange, but its shares are now listed only on São Paulo’s B3 exchange.

What the Court Decided

Judge Larissa Gaspar Tunala of São Paulo’s 3rd Bankruptcy and Judicial Recovery Court signed the ruling at 11:20 a.m. local time.

GPA, formally Companhia Brasileira de Distribuição, opened the case on Tuesday, 10 March, and presented the final plan on 5 May. Creditors holding 57.49% of the covered claims signed it, above the majority Brazilian law requires.

The ruling replaces the old claims with new terms binding every covered creditor, including those who did not sign. The judge rejected all six objections and refused requests to appoint an outside administrator or an accounting expert.

São Paulo state prosecutors first opposed immediate approval, then revised their opinion and backed the plan with interpretive caveats. The ruling adds clarifications, including that GPA’s release from the debts does not extend to guarantors, controlling shareholders or managers.

How the GPA Debt Plan Works

The plan covers unsecured claims not tied to day-to-day supply, services or rent, so current suppliers and landlords stay outside it.

Creditors chose among three payment options, according to the ruling. Holders of 88.4% of the claims picked Option A, which carries no nominal haircut but requires lending new money to GPA.

That new money is capped at 200 million reais (about US$40 million) and secured on receivables. Another 8.34% chose Option B, while 3.26% sit in Option C, with a 70% haircut and payments from 2032 to 2036.

GPA also published a material fact, a mandatory notice to investors, through Brazil’s securities regulator on Wednesday. Its charts show 4.5 billion reais (about US$900 million) of pre-restructuring debt becoming 2.0 billion reais (about US$400 million) of cash debt.

Another 1.1 billion reais (about US$220 million) becomes a debenture series convertible into shares. Before the plan, 1.908 billion reais (about US$382 million) of that debt fell due in 2026 alone.

GPA says average maturity stretches from 2.1 years to 6.4 years. The average cost falls from CDI plus 1.8% a year to CDI plus 0.5% for the non-convertible part.

The CDI is Brazil’s interbank benchmark rate. Conversions use the Central Bank of Brazil’s PTAX rate for 7 October, 4.99 reais per US dollar.

Who Objected and Why the Judge Overruled Them

The objectors held 7.98% of the covered claims, according to GPA’s response quoted in the ruling. They included Grupo Casas Bahia, the electronics retailer, which cites 231.7 million reais (about US$46 million) from three arbitration cases.

Casas Bahia argued the plan lumped 22 financial creditors together with eight non-financial ones that never signed. The others were Cone, two transport firms, records-storage company Logged Rio, an individual debenture holder and holders of real-estate receivable certificates.

Certificate holders argued that creditors tied to Itaú Unibanco, one of Brazil’s largest banks, supplied a decisive share of support. The judge found no concrete evidence of abuse and refused to exclude that bloc’s support.

She declined to weigh the plan’s economic fairness, saying such questions belong to talks between GPA and its creditors. Objectors now have 30 days from publication to make a final choice of payment option.

What It Means for You

GPA’s board voted in March 2024 to delist its American Depositary Shares from the New York Stock Exchange. JPMorgan, the depositary bank, then ended the remaining depositary receipt programme on 26 December 2025.

Former receipt holders who never surrendered them may be due cash if the depositary sells the underlying shares, under its notice. Anyone wanting exposure now has to buy the stock on B3, under the ticker PCAR3.

Part of the restructured debt is convertible into new shares, which the judge noted means dilution for existing shareholders. In its March petition, GPA blamed a Selic policy rate of about 15% a year for its financing costs.

It said it paid more than 3.3 billion reais (about US$661 million) in financial expenses across 2024 and 2025. Shoppers should notice no change, as GPA says its stores operate normally.

The company runs more than 728 stores and 36 fuel stations with about 37,000 direct employees, according to its petition. Its 2025 revenue was 20.6 billion reais (about US$4.1 billion).

What Is Not Known

GPA has not said how far existing shareholders will be diluted when the convertible debentures turn into stock. Its filing does not show how the rest of the old debt is settled.

It is not known whether Casas Bahia, Cone or any other objector will appeal. GPA has not given a date for signing the new-money and debenture documents.

What Comes Next

With the GPA debt plan approved, the company will sign the documents for 200 million reais (about US$40 million) in new money. Objecting creditors must pick their payment option within 30 days of the ruling’s official publication.

Approval of the GPA debt plan does not settle claims still disputed in other courts or arbitration, which keep their jurisdiction.

Frequently Asked Questions

What is GPA?

GPA, formally Companhia Brasileira de Distribuição, runs the Pão de Açúcar and Extra Mercado supermarket chains in Brazil. It has operated in food retail since 1948.

Is GPA still listed on the New York Stock Exchange?

No. Its board approved the delisting in March 2024, and JPMorgan ended the depositary receipt programme on 26 December 2025.

What is an out-of-court restructuring in Brazil?

A company signs a deal with most affected creditors and asks a bankruptcy court to approve it. Approval then binds the remaining creditors in the covered group.

How much debt does the plan cover?

It covers 4.568 billion reais (about US$915 million) of unsecured claims not tied to day-to-day supply, services or rent. Holders of 57.49% of those claims signed it.

Are GPA’s stores affected?

GPA says its operations are normal and it is up to date with suppliers, customers and partners. Those groups are not part of the restructuring.

Sources: GPA material fact on the plan’s approval, 7 October 2026; São Paulo court ruling, case 4036772-74.2026.8.26.0100; GPA investor relations, out-of-court restructuring; GPA notice on NYSE delisting, 29 March 2024; JPMorgan depositary termination notice, 26 November 2025; Central Bank of Brazil PTAX rate; Poder360; Estadão (all accessed 8 October 2026).