SAO PAULO, July 14 (Reuters) – Brazilian oncology treatment provider Oncoclinicas has filed for an out-of-court restructuring to renegotiate and reprofile about 5.1 billion reais ($993.8 million) in unsecured financial debt along with other intercompany claims, sending its shares higher on Tuesday.
The move comes as a growing number of Brazilian companies are seeking to renegotiate debt with creditors while avoiding the costs of formal bankruptcy protection proceedings. So far this year, 33 companies have followed this path.
Oncoclinicas said in a securities filing on Tuesday that creditors holding around 37% of the affected claims had already agreed to the proposed plan, a level sufficient for the filing under Brazilian law. The filing was unanimously approved by the board and will be submitted for shareholder ratification at an extraordinary meeting.
The company said the restructuring plan could include a shareholder capital injection, the conversion of part of the covered claims into equity, the replacement of a portion of the debt with new debt and an extension of debt maturities.
Civil association Instituto Empresa said that while Oncoclinicas has yet to disclose the final terms of its restructuring plan, the tools outlined by the company are commonly associated with varying degrees of creditor impairment.
The process does not affect Oncoclinicas’ operational obligations to clients and suppliers, the company said, adding that services and day-to-day operations across its oncology network would continue normally.
As part of its restructuring efforts, subsidiaries terminated two built-to-suit lease agreements, including one involving a property in Sao Paulo with an estimated 76 million reais termination penalty that has been included among the claims covered by the restructuring.
MARKET REACTION
Shares in Oncoclinicas rose around 4% to 0.8 reais in midday trading in Sao Paulo, although the stock remains down roughly 70.8% year to date.
Valor Economico reported on Tuesday, citing sources, that Brazilian private equity firm IG4 plans to acquire Oncoclinicas’ convertible debentures, investing about 500 million reais in the securities. IG4 declined to comment.
The private equity management firm is focusing on investing in a smaller number of companies, targeting larger, complex, and global deals, company executives told Reuters last month.
IG4, which recently gained co-control of petrochemical firm Braskem, is also seeking to acquire control of sugar and ethanol producer Raizen, as the producer completes its out-of-court restructuring.
($1 = 5.1318 reais)
(Reporting by Isabel Teles; Additional reporting by Luciana Magalhães and Victoria Pacheco; Editing by Andrew Heavens, Emelia Sithole-Matarise and Mark Porter)
Comments