Souto Correa Advogados, Freire, Assis, Sakamoto, and Violante Advogados and Galdino, Pimenta, Takemi, Ayoub, Salgueiro, Rezende de Almeida have helped Brazilian shipyard group Ecovix complete its judicial reorganisation – which started almost a decade ago – including the restructuring of 8 billion reais (US$1.4 billion) worth of debt.

Judge Fabiana Gaier Baldino of the second Civil Court of Rio Grande approved the conclusion of Ecovix’s judicial reorganisation on 22 July.

Following the recent ruling, Ecovix – which operates through five subsidiaries across Brazil – enters a new stage of recovery focusing on shipbuilding and port operation contracts, primarily with Transpetro, the logistics arm of oil giant Petrobras.

The judicial reorganisation started in December 2016, following the anti-corruption task force Lava Jato and a downturn in global shipping demand. Lava Jato exposed corruption involving Petrobras, one of Ecovix’s partners, leading to suspended contracts and financial instability.

In 2018, creditors approved a restructuring plan for Ecovix’s US$1.4 billion debt, with legal support from Souto Correa and Freire Assis. The plan involved repayments via instalments and funds from debt issuances.

Following an amendment in 2023, Ecovix agreed to repay two-thirds of its creditors within five years, while remaining under court supervision until all payments are completed. Creditors include stakeholders like Tupi BV – a consortium of Petrobras, BG Group and Galp – Banco Bradesco, Caixa Econômica Federal and Cosco Shanghai Shipyard.

After completing its judicial reorganisation, Ecovix is now implementing the terms of its recovery plan. As part of the restructuring terms, its outstanding debt was reduced to around R$1.5 billion (US$280 million), though only R$100 million (US$19 million) has been repaid so far.

The remaining debt will be converted into 25-year debentures, for which the company will pay an interest rate based on the taxa referencial plus an additional 0.5%. At the time of writing, Ecovix had not issued the debentures yet.

The taxa referencial, or reference rate, is a benchmark interest rate calculated by the Central Bank of Brazil. In July, the rate stood at 0.18%.

The plan also requires Ecovix to be sold within 13 years (15 years from the last amendment, signed two years ago). Once ownership changes, debenture holders can either cash out from the sale or keep the bonds until they mature.

In February, Ecovix signed a contract with Transpetro worth US$278 million for the construction of seven coastal tankers and is set to bid on two more contracts with Transpetro at the end of August for the construction of more tankers. Ecovix is also seeking authorisation from Brazil’s National Agency for Waterway Transportation (ANTAZ) to operate Private Use Terminals.

Counsel to Ecovix

Souto Correa Advogados

Partners Carlos Souto, Luis Felipe Spinelli, Rodrigo Tellechea and Luis Peretti, and associates Gabriela Mânica, Darwin Otto, Maria Carolina Bichara, Erika Donin, Verena Waisberg, Marina Villas Bôas and Anna Maria Duarte