Americanas Receives Creditor Approval For Bankruptcy Plan Amid $4B Accounting Inconsistency

Summary

  • Brazilian company Americanas filed for bankruptcy this year due to a $4 billion accounting discrepancy.
  • A key milestone for the company, approval for its rescue plan was received but necessitates ratification by a Brazilian judge.
  • The court-approved rescue plan includes two years for implementation, a capital injection of 12 billion reais ($2.5 billion) from the 3G trio, and a 12 billion-real debt-for-equity swap.
  • A whopping 90% of creditors approved the plan after a six-hour-long online meeting.
  • Neither the former employees nor small businesses voted on the plan, as it did not change their payment terms, per the bankruptcy trustee.
  • Currency exchange rate: 1 dollar equals 4.8637 reais.

Americanas Bankruptcy

Americanas, a long-standing company supported by the 3G trio, declared bankruptcy earlier this year following the discovery of $4 billion in accounting irregularities.

Judge’s Ratification Required

Though the approval is a significant milestone for Americanas, it still requires confirmation from a Brazilian judicial authority.

Rescue Plan Implementation

Following court approval, the company will have two years to put into effect the recovery plan. This involves not only a capital boost of 12 billion reais ($2.5 billion) from the 3G trio but also a debt-for-equity swap worth 12 billion reais.

Creditors’ Approval

A considerable majority of creditors, about 90%, gave the green light to the rescue plan during a comprehensive online meeting that lasted over six hours.

Creditors’ Vote Absence

Creditors, including former employees and smaller firms, abstained from voting on the plan because it did not change their payment terms, as per the bankruptcy trustee’s details.

Currency Exchange Information: 1 dollar equates to 4.8637 reais.

The outcome of this situation is inextricably linked to the economic health of Brazil and may cause fluctuations in the foreign exchange and trading markets, notably affecting assets pegged to the Brazilian Real.

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