Americanas, the Brazilian retailer at the heart of an accounting scandal that has pitted some of the nation’s biggest corporate names against each other, has filed for bankruptcy protection hours after revealing its cash reserves had evaporated.
Backed by several Brazilian billionaires, including the country’s richest man Jorge Paulo Lemann, Americanas has been engulfed in crisis since it revealed accounting “inconsistencies” of more than R$20bn ($3.8bn) over a week ago.
Since then the company’s shares have plunged more than 85 per cent and it has been embroiled in a bitter judicial fight with creditors, including Banco Bradesco and investment bank BTG Pactual.
After a court order on January 13 forbade the banks from freezing or seizing Americanas’ assets, BTG took an unusual personal shot at the company’s billionaire backers, which in addition to Lemann also include Marcel Telles and Carlos Alberto Sicupira. The three own about 31 per cent of the business.
“The three richest men in Brazil (with assets valued at R$180bn), anointed as kind of demigods of ‘good’ world capitalism, are caught with their hands in the cash register of what, since 1982, has been one of the main companies of the trio,” said BTG lawyers in a filing to the court.
“Although the successful trajectories are written in bestsellers, Lemann, Telles and Sicupira built their empires on foundations that are not as solid as they seem.”
The three men declined to comment.
Lemann, Telles and Sicupira are the founders of private investment group 3G Capital, which owns stakes in Chicago-based Kraft Heinz as well as the holding company that controls Burger King. 3G Capital has no involvement in the dispute as it does not own any stake in Americanas.
The three billionaires rose to fame in the late 1980s after acquiring Brahma, a domestic brewer, which they later used as a platform to assemble what would become the world’s biggest beer company — Anheuser-Busch InBev — through a series of bold acquisitions over more than three decades.
On Wednesday, BTG succeeded in partially overturning the January court order, obtaining a new decision that allowed it to withhold R$1.2bn from the company to compensate for part of its debts.
Then on Thursday, Americanas revealed it had just R$800mn available in cash, shortly before filing for bankruptcy protection. The retailer declared debts of R$43bn to the court.
“I don’t think they [Americanas] are going to survive. It is a Herculean mission [to restructure],” said Geraldo Affonso Ferreira, independent non-executive director and chair of the advisory board at asset manager ESH Capital.
“The major issue is to find financiers after all that has been disclosed so far. They have below R$1bn in cash. Who is going to give them money to buy and sell goods?”
Americanas is a ubiquitous brand in Brazilian high streets and malls. The company employs over 40,000 and runs more than 3,500 stores, selling everything from electronics to snacks and homeware.
The R$20bn accounting “irregularity” stemmed from an operation common among Brazilian retailers. Banks would pay Americanas suppliers in advance, with the company then responsible for the repayment of these loans, including interest payments.
These interest transactions, however, were effectively camouflaged by the company, which did not classify them as financial debts. The practice, which resulted in higher reported profits, is believed to have gone on for years.
The scandal was revealed just two weeks after Sérgio Rial, the former head of Santander’s Brazil unit, took the helm at Americanas. He immediately resigned after disclosing the news, with the company now run by João Guerra, its former head of HR.
The company’s last full set of audited accounts in 2021 was signed off by PwC. The Brazilian Association of Investors, known as Abradin, has called for regulators to investigate PwC, calling the scandal a “multibillion fraud”. PwC declined to comment.