US fund acquires bank shares and becomes controller of Atvos, Odebrecht

The American Fund Lonely Star announced on Monday 4 that it signed a purchase and sale agreement with the Natixis bank and became the parent company of Agroindustrial assets, a sugar and alcohol company of the Odebrecht group, which is in judicial reorganization. In the petition, filed today at São Paulo’s 1st Bankruptcy and Judicial Reorganization Court, the fund claims “to be ready and organized to take over the management and conduct of Atvos’ businesses.”

Odebrecht was notified to formally deliver the acquired shares, according to a source heard by the State. If the company delivers the papers, Lone Star takes over immediately. But there may be resistance and questions from the Bahia group. According to an executive close to the company, the measure taken by the fund before the restructuring is an aggressive attitude.

With a debt of almost R $ 12 billion, Atvos went bankrupt in May of last year. The company was the first of the Odebrecht group to resort to the protection of the Justice to renegotiate its debts. At the time, the company said the judicial recovery was “the result of a hostile attack by an international fund, which through legal procedures put the company’s operations at risk.”

The group referred to the Lone Star fund, which had approximately R $ 1 billion in receivables (Atvos’ third largest creditor). At that time, Atvos delayed payment to the US fund, which went to court and secured the seizure of a significant portion of Atvos’ cane production.

Creditors meeting

Since then, divergences continued until the fund managed to buy shares in banks that had company guarantees. Now a new chapter begins in this dispute. The meeting to approve the recovery plan for Atvos, the country’s second largest ethanol producer, is scheduled for Friday the 8th and, for now, is being held.

More or State He found out that Lone Star must come up with a new plan to discuss it with creditors. The goal is to put new money into Atvos so that it can continue to operate, especially at this time when it was hit by the coronavirus crisis.

“The Lone Star Funds group is aware of the current financial situation of the companies it now controls and understands the need for short-term contributions of financial resources, committing to make contributions, obtain financing or any other way to stabilize companies’ cash. in the short, medium and long term, “says the company, in the petition to the judge made by Thomaz Bastos, Waisberg and Kurzweil.

The amount of the contribution was not reported, but it may be around R $ 300 million that had already been considered in the market. The expectation is that the funds will come out of Lone Star’s coffers. Worldwide, the group owns $ 40 billion in assets under management.

As soon as it takes control of the company, the fund intends to change the entire board and also the attorneys leading Atvos’s judicial recovery. Dear, Lone Star declined to comment.

In addition to the US fund, the National Bank for Economic and Social Development (BNDES) and Banco do Brasil are Atvos’s largest creditors. The two public banks own 66% of the total debt.

In a note, Odebrecht stated that Atvos “was surprised today with the receipt of the notification that the shares representing 51% of Atvos Agroindustrial would have been forcibly sold by creditors with a guarantee of fiduciary sale of these shares.” The company, it says in a note, is legally evaluating the operation and will inform in due course of possible legal measures taken.

In any event, as a shareholder of the Atvos group, it will continue to support the approval of its recovery plan at the meeting designated for next Friday, which is crucial for the preservation of the interests of the company, its creditors and shareholders and the group of its more than 10,000 workers. “