Grupo Moreno, a sugar and ethanol group founded in the 1970s and comprising three plants in the state of São Paulo, finally had its judicial reorganization plan approved by creditors and ratified by the court, after more than a year of negotiations and meetings, much of which occurred in the midst of the pandemic.
The request for judicial reorganization was filed in September 2019, brought on by the crisis within the sector and the indebtedness of the group. Total debt amounted to BRL 2.3 billion, of which BRL 1.8 billion was with banks. Over 7,000 creditors were involved.
It took countless virtual meetings with banks and seven virtual general creditors’ meetings for the judicial reorganization plan to be finally approved, on 13 November 2020. The final virtual meeting, at which the plan was approved, actually started on 11 November, was interrupted, and eventually came to an end in the late evening on 13 November.
Fabiana Solano, who heads the Felsberg team advising Grupo Moreno, noted that, given the significant amount of debt and the large number of creditors, and added to that the complication of meetings during the pandemic, the approval of the plan was achieved within a reasonable timeframe.
The judicial reorganization plan was approved by 97.66% of labor creditors; 100% of creditors with collateral; more than 95% of unsecured creditors; and over 83% of micro and small business creditors. About one hundred representatives of the more than 7,000 creditors were present.
The company obtained a substantial haircut with the plan and will have a period of three years in which to pay off BRL 1 billion. “The intention is for payment of BRL 900 million within 24 months, plus an additional BRL 100 million in the following 12 months,” explained André Drumon, senior associate on the Felsberg team.
To make payments, Grupo Moreno may undertake raising of new funds, look for a partner to acquire an equity interest or other assets, or sell up to two of its plants within 24 months. The three plants are in Luiz Antonio, Monte Aprazível and Planalto, together employing 4,200 people and having the capacity to grind 13 million tons of sugarcane per year, one of the largest in the state of São Paulo.
Most of the debts are composed of bank creditors that together hold about BRL 1.8 billion. The remainder is divided into labor creditors (approximately BRL 21 million), unsecured creditors (about BRL 200 million), and micro and small businesses (about BRL 15 million).
The last clarification appeal against the approval was filed on 15 December and is still pending a court decision.
Thomas Felsberg, Founding Partner of Felsberg Advogados, added that this approval is one of an impressive cycle of five large restructuring projects in different areas of the economy that the firm was involved in during the last quarter of the year.
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