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Third time lucky for TMT restructuring

After two failed attempts, Brazilian car manufacturer TMT Motoco has gained creditor approval for its judicial restructuring plan.

This third version of the company’s restructuring plan provides for the sale of its Campo Largo industrial plant to Walter Torre for 75 million reais (US$44.3 million), with the TMT creditors receiving 31.5 per cent of the money owed to them.

The plan has been approved by 99.6 per cent of creditors with no dissenting votes, while only three minor creditors refrained from voting. Partner Thomas Felsberg of Felsberg, Pedretti, Mannrich e Aidar Advogados, counsel to TMT, says it was “a complex transaction which involved over two years of negotiations with creditors and employees and several general creditors meetings.”

The company’s creditors include Unibanco, Banco Itaú, HSBC and Bradesco.

Felsberg explains that TMT was in serious financial difficulties after having signed up to a large amount of bank loans in order to face the free-fall of the dollar in relation to Brazil’s real. “The judicial restructuring allowed TMT to renegotiate and pay its debts, restructure its activities in an efficient manner and emerge from a critical situation, harmonising the interests of its creditors, employees and the local community.”

This first restructuring attempt was denied by the judge of a court in Campo Largo, who rejected it due to the structure of creditor loans. The second attempt was unsuccessful because the a previous buyer for the plant, Phenix Gestão Consultoria e Participações, failed to pay the amounts due to creditors on time.

Judicial trustee appointed by the Campo Largo court:

Marins, Bertoldi, Efing & Rocha
Partner Marcelo Bertoldi

Counsel to TMT Motoco

Felsberg, Pedretti, Mannrich e Aidar Advogados
Partners Thomas Benes Felsberg and Joel Luís Thomaz Bastos and associates Fabiana Bruno and Eduardo Zilberberg

Counsel to Tecumseh (TMT parent company)

Kirkland & Ellis LLP
Partner Paul Basta

Counsel to the lenders:

Bradesco
In-house counsel-Marcio Vendas and Margarida Santonastaso

Unibanco
In-house counsel-Gilberto Regiani and Fernando Romanelli;

Itaú BBA
In-house counsel-Gustavo Tavares, Handdrey Rodrigues and Ronaldo Amaral

HSBC

Bernardi & Guimarães Gallo
João Ferrari and Bruno Chiaradia

AVS

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