Americans: the compromise of the trio

Americanas’ creditors want Carlos Alberto Sicupira, Marcel Telles and Jorge Paulo Lemann to inject at least R$10 billion into the company as part of a plan to save the company, but Americanas’ decision to try to buy time in court has caught the banks by surprise and increased the climate of distrust.

In a meeting on Friday, key shareholder envoy Sergio Rial met with a who’s who of the financial system: Milton Maluhy, the CEO of Itaú; Marcelo Noronha and Eurico Fabri, wholesale and retail vps of Bradesco; a Safra executive; Daycoval’s Carlito Dayan; Fausto Andrade, on his last day as president of the Banco do Brasil; Roberto Sallouti and André Fernandes, CEO and chief risk officer of BTG Pactual; and Mario Leão, CEO of Santander Brasil.

Rial signaled that the main shareholders would be willing to invest 6 billion reais in the company, but he made no promises. The banks replied that it was not possible to start the conversation with less than R$10 billion.

At that point, however, Americanas had already gone to court to protect itself from creditors – but preferred to omit this information in the meeting with the banks. Most discovered through the press.

The banks told Rial that the time had come to give the correct name to what happened – “fraud” -, they asked for the presence of shareholders, and noted that, although Lemann, Telles and Sicupira had recently become only “shareholders of reference”, were the shareholders of the controlling company for most of the time the fraud occurred.

The consensus in Faria Lima is that the trio are at least co-responsible for the disaster.

Investment bank executives who have already worked for Americanas and B2W in various operations say that the group’s executives did not take any decisions without consulting the controllers, in particular Sicupira, which is increasingly present in the business.

The creditors point out that Roberto Thompson – partner and advisor of the trio – and Paulo Alberto Lemann, one of Jorge Paulo’s sons, in addition to being part of the board, also participate in the finance committee.

The history of accounting turmoil at companies linked to the trio is also examined in a new light.

Soon after taking over América Latina Logística (ALL) – the forerunner of Rumo – in 2015, Cosan decided to re-release ALL’s 2013 and 2014 financial statements, reclassifying items such as trade payables, cash, fixed assets, taxes and other payables. The way EVERYONE reported results inflated the company’s EBITDA.

A few years later, in 2021, Kraft Heinz – in which the Brazilians are partners with Warren Buffett – paid $62 million to the SEC as part of a deal to end an investigation into its questionable accounting practices.

Two years earlier, the SEC had charged Kraft with “committing various types of accounting malfeasance, including recognizing discounts not received from suppliers and maintaining false and misleading contracts with suppliers, which unduly lowered the company’s cost of goods sold.” ‘company, obtaining alleged ‘savings’. Kraft, in turn, disclosed these purported savings to the market.”

As with ALL, accounting irregularities allowed Kraft to report inflated adjusted EBITDA. In June 2019, after the SEC investigation began, Kraft rereleased the numbers, eliminating $208 million in misrecognized cost savings in nearly 300 transactions.

“After ALL, after Heinz… again??? ‘You again?’” says the CEO of an American creditor bank.

But the best climate thermometer between the banks and the trio is perhaps BTG Pactual’s petition to recover R $ 1.2 billion that Americanas had deposited in the bank. The bank’s lawyers said that Americanas “is the fraudster asking the bars of justice for protection ‘against’ his own fraud. … He is the crook disguised as the boy from the old forensic anecdote, who, after killing his father and mother, begs the jurors for mercy because he is an orphan.

The explosion of Americanas – and its possible rescue – will write an important chapter in the history of Brazilian capitalism. In addition to being business icons and synonymous with success over the last few decades, the trio still control very significant assets – and how they approach this episode will be decisive both for their biographies and for the value of their entire ecosystem of companies.

“The guys have BRL 180 billion and they don’t want to show up with BRL 10-15 billion to solve the problem?” asks another creditor, foaming. “Are they going to leave it in the hands of minorities, bondholders, bondholders and banks?”

With a mixture of perplexity, fury and melancholy, the market is trying to digest the events: first, the sudden discovery of the scam by a former CEO of a creditor bank. “Did Rial already know?” became the subject of Faria Lima. Then, the shock of the size of the debt, with the Americans carrying a debt of R$40 billion. Finally, the perception that shareholders are in no hurry.

“They announced the problem without knowing how to quantify it, they threw the company into limbo and they seem to be in no hurry to find a solution,” said an Itaim manager.

For a banker involved in the negotiations, the Americans could still be saved. “The company has R$9 billion in cash, plus R$5 billion in credit card receivables – a liquid asset – and, with a little goodwill, could sell Hortifruti for R$2 billion $. A capital increase of 10 billion reais and creditors who convert about 20% of the debt would resolve the situation”.

Could be. But even so, the “aggressive accounting” revelations show that Americans have never had the profitability they claimed to have. In this sense, even the injection of 10 billion reais may not change anything for the shareholders, forcing the trio to decide whether to invest good money in a bad deal.

Since they are notorious for their cold-hearted investment decisions, letting them go bankrupt was perhaps the most logical way out. On the other hand, it would have the repercussions of a tsunami.

“These 30 days should help them understand the extent of the consequences and decide whether to burn money and how much. Had it been for the company, they probably would have already thrown in the towel», says another banker, who has been close to the group for 30 years. “The reality is that the game is no longer AMER3, but retaliation against the 3G system and criminal consequences for directors and advisers. The company is gone. Happy is the class of the Mercado Livre.

Geraldo Samor

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