Usina Santa Terezinha (Usçucar), the largest sugar and alcohol company in Paraná and one of the ten largest in Brazil, filed for judicial recovery last night after a setback in negotiations with creditor banks, as determined by Valor. The company has an estimated financial debt of R$ 4.6 billion, mostly in US dollars (US$ 900 million).

Santa Terezinha filed for judicial recovery after discovering that the bank Votorantim, to which it owes around R$ 150 million, had filed three enforcement requests in court. One of the actions, which called for the execution of R$ 40 million, was even carried out via BacenJud. The plant is represented in the process by the law firm Thomaz Bastos, Waisberg, Kurzweil Advogados.

The debt execution by Votorantim took the company from Paraná by surprise, as it was about to sign an agreement to renegotiate the terms of its debt with 18 creditor banks - among them Votorantim itself -, after more than a year of negotiations.

Last year, Santa Terezinha informally agreed with the banks not to pay interest and principal on the debt while negotiating the restructuring of payments.

With the request for judicial recovery, negotiations with the banks will have to start over from scratch.

Usina Santa Terezinha's debt is basically with banks. According to a source close to the company, there are practically no late payments with suppliers or overdue taxes, and delays with labor creditors are not very representative.

During this period in which it did not pay the banks, Santa Terezinha maintained its investments in working capital and capital goods, according to a source close to the company.

However, the company has been facing problems with a lack of sugarcane to fill the capacity of its production units in the face of adverse weather conditions in its operating region since 2015. Of its 11 plants, three did not operate in the 2018/19 harvest. The company processed 14 million tons of cane in this cycle, but has already crushed 18 million tons in the 2016/17 harvest.

For the 2019/20 season, which will start in April, Santa Terezinha will also suspend grinding at Usina Moreira Sales. The sugarcane from the region where the unit operates will be directed to Usina Tapejara.

The company also controls two port terminals (Pasa and Álcool do Paraná) and CPA Trading.

Recently, Santa Terezinha made changes to its governance structure to professionalize, above all, operational management. Some members of the Meneghetti family, which owns the company, left the board and market executives were hired. Production “clusters” were also formed, integrating the operational activities of plants that are geographically close.

The company had already renegotiated its debts in 2016, at the time avoiding the path of judicial recovery at a time when several other companies in the segment were taking this path.

Source: Camila Souza Ramos via Valor Econômico.