by Arthur Almeida, with RDB charts by Jayjeet Sharma
Last month, Samarco Mineracao’s reorganization plan was sanctioned by the court overseeing its judicial recovery process. The Brazilian mining company’s proposal relied on the terms of an agreement reached with its shareholders (Vale SA and BHP Billiton) and an ad hoc group of bondholders, putting an end to a long-running dispute that had been ongoing since the company filed for bankruptcy in April 2021. In addition, Credito Real bondholders reached the 50% threshold required for approval of the Mexican non-bank financial institution’s Restructuring Support Agreement (RSA), thereby opening room for a concurso mercantil filing, expected for the short-term.
Speaking of concurso filings, in August, Tangelo (formerly Mexarrend) commenced an in-court debt restructuring proceeding with the Second District Court for Commercial Insolvency Matters in Mexico City, which admitted the company’s bankruptcy protection request and appointed a visitador auxiliary to assist it in determining whether the company meets the law criteria established for a Mexican bankruptcy proceeding. In Brazil, online travel agency 123 Milhas filed for judicial recovery to restructure roughly BRL 2.3bn in debt.
Source: Debtwire’s Restructuring Database
Also in August, Chile-based salmon farmer Nova Austral presented its debt restructuring plan, centered on a debt-for-equity swap and asset sale proposals. The third group of AlphaCredit subsidiaries also presented its creditor agreement, while the creditor agreement proposed by the second group of subsidiaries of the Mexican non-bank financial institution was sanctioned by the court and appealed by dissident creditor AMF Mezzanine.
Source: Debtwire’s Restructuring Database
Other significant appellate-related news from last month included (i) an injunction granted by the Superior Court of Justice to suspend the appellate court ruling declaring Coesa (formerly OAS) insolvent; (ii) the rejection of an appeal filed by the Rio de Janeiro Public Prosecutor on the appointment of two firms to jointly act as judicial manager in Oi SA’s judicial recovery process; and (ii) the rejection of the appeal filed by Americanas SA creditor Bradesco against the participation of two foreign affiliates of the Brazilian retailer in the judicial recovery.
Source: Debtwire’s Restructuring Database
Light SA’s renegotiation talks with creditors were moving at a slow pace last month, with the electricity services provider focusing on efforts to bar the individual execution lawsuit commenced by Santander in July. Also in August, three funds managed by Altana Wealth filed a new breach-of-contract lawsuit against the Republic of Venezuela over unpaid bonds, this time adding additional counts related to both bonds and oil-indexed payment obligations. In other news regarding individual lawsuits, Nova Austral was served with a lawsuit filed by Administradora de Fondos Moneda containing accusations of alleged fraud and seeking USD 300m. The filing is very similar to another suit, filed by investor Fratelli Investments in July.
Source: Debtwire’s Restructuring Database
August also saw Brazilian auto parts maker Sifco SA request the reopening of its Chapter 15 recognition case to seek an order for turnover of funds and approving the redemption of bonds. Mexican media group TV Azteca agreed to initiate a mediation proceeding with a group of bondholders in order to reach an agreement concerning the involuntary Chapter 11 case filed by the creditors against the company.
Source: Debtwire’s Restructuring Database
Offshore Drilling Holding subsidiary LaForta Gestao e Investimentos was authorized to dismiss its Chapter 11 case and to make the distribution to creditors of proceeds from the sale of the La Muralla IV drilling rig. In addition, Grupo FAMSA secured bondholders acquired the control of the Mexican retailer’s US assets.
Other court developments of interest last month involving Latin American distressed companies include (i) Americanas and lenders Banco Safra and Banco Bradesco fighting over the inclusion of certain guarantee-related claims held by the banks in the company’s in-court restructuring process; (ii) Cimento Tupi unsecured creditors asking the court to replace the judicial manager due to alleged lack of impartiality; and (iii) Oi asking the court to extend the stay period of its bankruptcy protection.
The months ahead
