More than 20 Brazilian publicly traded companies are currently undergoing bankruptcy protection or restructuring, driven by high interest rates and financial distress. Notable cases include Oi and Americanas, with average company leverage increasing. Experts predict worsening conditions by 2026, with opportunities for market consolidation through mergers and acquisitions as firms face mounting debt pressures.
In Brazil, over 20 publicly traded companies are currently seeking bankruptcy protection or restructuring, a trend anticipated to worsen in 2025 due to persistent high interest rates impacting debt repayments. Notable cases include Bombril, Agrogalaxy, Oi, and Americanas, with Oi having filed for bankruptcy protection twice. Publicly listed companies face significant transparency issues as their large debts necessitate regulatory financial disclosures, shedding light on smaller firms that may be in worse financial situations.
An analysis from Valor Data on 52 companies listed in Brazil’s Ibovespa index indicates an increase in average leverage from 1.47 to 1.64. Financial experts emphasize that the crisis is adversely affecting even larger companies. As Fabiana Solano from Felsberg Advogados states, “Persistently high interest rates and global instability are having an immediate impact on businesses.” She cautions that listed companies, despite having access to various funding sources, are now under immense debt pressures.
Among those in distress, OSX and Light are notable for ongoing restructuring efforts, while textile manufacturer Teka has been under bankruptcy protection for over a decade. The rising number of filings is likely attributed to companies like Azul and Infracommerce that have successfully restructured debts, avoiding more drastic measures. Despite access to credit, the equity market remains inactive as investor sentiment wavers.
Listed companies must adhere to strict disclosure requirements, as highlighted by Roberto Zarour of Lefosse Advogados. Unlike private firms, they are obligated to keep investors informed, which can complicate sensitive negotiations. The increasing bankruptcy filings among public companies accentuate the current economic turbulence, with Marcelo Ricupero warning, “No company is immune to the current turbulence. The trend is for more cases to emerge.”
Many firms are facing relentless debt pressures, with Laura Bumachar noting a surge in bankruptcy cases. She anticipates a more significant crisis in 2026, where many companies struggle to stay afloat. As strong companies may engage in mergers and acquisitions to consolidate interests, market concentration is likely to heighten. Significant distressed M&A activity is already being observed.
Specifically, Light has reported creditor interest exceeding expectations in its restructuring plan. Azul plans to improve cash flow through recent agreements, while Aeris asserts that its financial talks are not associated with bankruptcy. Viveo has successfully adjusted its debt covenant schedule, and Teka is proceeding with liquidation to ensure operational continuity despite potential shareholder pushback. Infracommerce is also refining its capital structure as part of a restructuring initiative outside bankruptcy protection.
Agrogalaxy, Americanas, Oi, and OSX did not provide comments, and Bombril did not respond to inquiries. The information was translated and adapted from Valor Econômico and reviewed for compliance with editorial standards.
Brazil’s corporate landscape is facing increasing bankruptcy filings among publicly traded companies due to high interest rates and financial strain. With more companies expected to seek protection in 2025, the economic environment remains precarious. Strict regulatory requirements ensure transparency, but this also reveals the challenges faced by smaller firms. The current trend of debt restructuring and potential M&A activity indicates a significant shift toward market consolidation as financially stronger entities seek to capitalize on distressed companies.
Original Source: valorinternational.globo.com
