Felsberg steers major Brazilian restructuring04/05/2018
Latin Lawyer / 04 May 2018
Stemac, Brazil’s largest generator maker and an important employer in the state of Goiás, is relying on Felsberg Advogados to restructure debts worth 700 million reais (US$200 million) as a dispute over where to hold proceedings comes to an end.
Brazil’s Superior Court of Justice ruled last week that a court in Itumbiara, a city in the central state of Goiás, should oversee the restructuring of embattled generator maker Stemac. The rulings came after a dispute arose over whether proceedings should be held in Itumbiara where Stemac’s industrial operations are based, or in Porto Alegre where its head office is located.
The dispute’s resolution paves the way for the company’s restructuring. After the Itumbiara court approves Stemac’s filing, it will have 180 days to approve a plan with its creditors and the judiciary. Debts contracted up to the date of approval will be frozen and renegotiated. Payments to more than 730 workers will continue.
Stemac hopes the judicial recovery process will buy it enough time to seal an M&A agreement with another company. It has been working on a strategic sale or association agreement since early 2017 and reports interest from several parties. João Carlos Mendonça, a partner at Felsberg, says the judicial recovery process gives all parties more legal certainty so the acquisition negotiations can be completed.
Latin Lawyer was unable to identify any other firms involved in the deal. Banrisul, state-owned development banks BNDES and FINEP and Santander are the main creditors.
Stemac is another victim of Brazil’s recession, which stretched from early 2015 to late 2016. It was the worst slowdown on record, with the country’s GDP shrinking by nearly 8% in two years.
Counsel to Stemac