InterCement, the third-largest cement and concrete supplier in Brazil, has sought Chapter 15 recognition from a New York bankruptcy court. The company, grappling with over a billion dollars in debt, initiated mediation procedures in Brazil to stave off creditor litigation while it aims to sell its assets.
InterCement $1B Bankruptcy: InterCement’s Financial Struggles
In a declaration filed alongside InterCement Brasil SA’s bankruptcy petition late Monday, the company’s foreign representative, Antonio Reinaldo Rabelo Filho, revealed that the cement maker began out-of-court restructuring efforts last year. This included selling its operations in Paraguay, Egypt, South Africa, and Mozambique to reduce some of its funded debt. The decision was driven by slumping demand for cement, rising materials costs, and challenging macroeconomic conditions that severely impacted the business.
InterCement $1B Bankruptcy : Debt Breakdown
InterCement’s financial troubles are significant. The company owes roughly 4.48 billion Brazilian reais ($825.77 million) on a series of debentures and over $750 million on a series of unsecured notes that mature on July 17, according to the petition.
Mediation Efforts
On Monday, InterCement filed for mediation in Brazil, marking the first step under Brazilian bankruptcy law that allows companies to attempt an out-of-court restructuring agreement with creditors. This move followed a group of unsecured noteholders filing an early discovery lawsuit in Brazil concerning the debt and another creditor initiating pre-insolvency proceedings against InterCement in the Netherlands.
Future Plans
InterCement is currently working to sell its remaining operations in Brazil and Argentina. The company filed for Chapter 15 recognition of its Brazilian mediation to stay litigation while it restructures. This step is crucial as InterCement navigates its way through significant financial challenges and aims to stabilize its business.
