Brazilian retailer GPA announced on Tuesday that it has reached an agreement on an out-of-court debt restructuring plan with creditors holding 57.49% of the claims addressed by the proposal, the company said in a securities filing.
The agreement covers 4.57 billion reais in total claims. Under the restructuring framework, GPA said the plan is designed to reduce its total obligations by more than 50% over time. If the terms are confirmed, the average maturity of the restructured debt would extend to 6.4 years and the average cost would fall to CDI plus 0.5% per annum.
Key elements of the restructuring include up to 1.1 billion reais in convertible debentures. These instruments will feature four conversion windows, scheduled for the first half of 2027, 2029, 2030, and 2031. In addition to the conversion component, participating creditors have committed to providing new financing of up to 200 million reais.
GPA said it expects the proposed plan to cut its cash outlays by more than 4 billion reais over the next two years. The company, which operates the Pao de Acucar supermarket chain, filed for out-of-court restructuring in March after contending with high debt levels.
The filing noted the company’s shareholder base includes the Coelho Diniz family and France's Casino. The announcement in the securities filing indicates the agreement has reached the threshold of creditor support specified in the proposal, but confirmation and implementation steps remain pending under the out-of-court process described by the company.
Context and implications
GPA's restructuring package combines maturity extension, lower financing cost, convertible instruments, and fresh liquidity. The structure aims to alleviate near-term cash pressure by reducing disbursements significantly over the coming two years while providing a mechanism for creditors to convert part of their claims into debentures at later windows.
As reported in the company's securities filing, the plan is contingent on the confirmation process and the participation of creditors holding a sufficient share of claims. The filing provides the quantified elements of the proposal but does not detail the timing of any final confirmations or the precise mechanics of conversion pricing, which will follow the terms set out in the proposal.
Summary of the agreement
- Creditors representing 57.49% of claims covered by the proposal agreed to the plan.
- The deal covers 4.57 billion reais in total claims.
- Planned reductions aim to lower total obligations by more than 50% over time and reduce disbursements by over 4 billion reais in the next two years.
- Average maturity would extend to 6.4 years and average cost would be CDI plus 0.5% per annum upon confirmation.
- Up to 1.1 billion reais in convertible debentures are included, with conversion windows in H1 2027, 2029, 2030, and 2031; participating creditors to provide up to 200 million reais in new financing.