Sequoia Logística Executes Billion-Dollar Debt Conversion in Survival Overhaul

Sequoia Logística (SEQL3) commenced a R$104.57 million ($18.7 million) capital increase on May 26, 2025, per filings with Brazil’s Securities Commission (CVM).

The logistics firm issued 13.07 million new shares at R$8.00 each, converting R$104.47 million of non-financial debt into equity. Creditors now hold 26.97% of the company, diluting existing shareholders to 73.03%.

This follows court approval of an extrajudicial recovery plan targeting R$295 million ($52.7 million) in supplier and lessor obligations. The capital hike marks Sequoia’s second restructuring in two years.

In December 2023, it renegotiated R$450 million ($80.5 million) in bank loans and debentures. The latest move addresses debts from failed e-commerce ventures and pandemic-era expansion missteps.

Once valued at R$5 billion during its 2020 IPO, Sequoia’s market capitalization collapsed to R$100 million ($17.9 million) by 2024 after a 98% stock plunge. A 2024 reverse stock split temporarily stabilized its B3 exchange listing.

Creditors approved five repayment options, including full equity conversion at a 78% premium to market prices or extended terms with haircuts up to 70%.

Sequoia Secures Creditor Backing for R$31 Million Debt Plan

Over half of eligible creditors endorsed the plan by March 2025, allowing R$31.17 million ($5.6 million) in 2025 payments. The deal excludes financial institutions and labor liabilities, focusing on legacy contracts with inactive suppliers.

Sequoia’s financials reveal R$1.91 billion ($342 million) in assets against R$564 million ($101 million) gross debt. Shareholder equity stands at R$306.7 million ($55 million), with a negative R$869 million ($155 million) net profit for 2024.

Operating cash outflows totaled R$77.46 million ($13.9 million), offset by R$116.27 million ($20.8 million) in financing inflows. The restructuring triggered a 40.56% stock surge in October 2024, though shares remain 75% below 2023 levels.

Management claims operations remain unaffected, directing conserved cash toward strategic growth initiatives. Challenges persist with Brazil’s 14.25% benchmark interest rate, complicating refinancing efforts.

Sequoia’s survival now hinges on stabilizing its capital base while navigating a sluggish e-commerce sector and high borrowing costs. The debt-to-equity swap provides short-term relief but underscores deeper structural risks in Brazil’s logistics market.

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