Ricardo Eletro protocols the largest retail judicial reorganization plan

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The retailer Ricardo Electro, which belongs to the Máquina de Vendas group, presented, on Tuesday night, the 14th, the draft of its judicial reorganization plan, the largest ever carried out in the retail sector. With debts of around R $ 4 billion and just under 20 thousand creditors, the company closed 400 stores and “is addressing the business to be a digital platform”, says Salvatore Milanese, founding partner of Pantalica Partners, the company’s financial adviser.

The document details the recovery plan guidelines, such as the form of payment for each type of creditor. The retailer’s request for judicial reorganization was approved by the court in August and had the effects of the pandemic as a final justification, after a series of difficulties faced by the group – which also owns the brands Insinuating, Salfer, City Lar e EletroShopping.

In the text, the Sales Machine proposes that creditors with collateral receive their payments with the value of a surplus of the company’s cash. In practice, the proposal is that what exceeds the minimum cash, of R $ 100 million, be distributed to creditors. In addition, a discount of 85% will be applied on the amounts.

If accepted, payment begins after the network has paid off its “strategic creditors”. Second Luiz Deoclecio Fiore, partner at OneBehalf, these creditors are, in general, suppliers who choose to maintain the supply and have advantages in receiving their credits.

Creditors without collateral, in the amount of up to R $ 3,500, will receive R $ 1,500 within a period of up to two years, as of the approval. Whoever has to receive more than R $ 3.5 thousand will have the payment linked to the excess of the minimum cash.

The discount for these creditors is also 85% and payment is made after strategic creditors have paid off their debts. Those who have more than R $ 3,500 to receive but want to receive without depending on the surplus cash, can choose to receive R $ 1,500 in cash in up to 24 months, and give up what remains. “Right now, we are giving priority to labor debts, as the dismissed workers are the main focus of the company’s attention”, says Milanese.

The company informed the court that it has R $ 30 million to pay part of this amount due to workers. These creditors must receive up to R $ 4 thousand and, for those who have more than that to receive, there will be a discount of up to 85%.

With the sale of physical assets, Ricardo Eletro should bet on e-commerce. The chain intends to maintain 100 physical stores.

For Fiore, the company’s plan has problems. He considers that the imposition of a minimum cash of R $ 100 million makes it difficult for creditors to receive their rights. “The plan should have the company’s fiscal situation more detailed. The company had problems with payments to the Union and this is not exposed so that creditors have a complete sense of what the company has to pay”, he evaluates.

Competitors

While Ricardo Eletro, which was traditionally the third largest force in the home appliance market, has suffered for years with a strong crisis, going through a series of restructurings, unsuccessful sales attempts and now resorting to judicial recovery, its main rivals – Via Varejo e Magazine Luiza – live a strong year at B3, the São Paulo Stock Exchange. Both are among the highest increases in the Ibovespa index, a reference for the Brazilian market. The first rose 71.8% since January, despite the pandemic of the new coronavirus, while the second had an even better performance: its shares rose 115.8% in the accumulated of 2020, with the second highest appreciation of the entire index, behind only the industrial giant Weg, which rose more than 130%. Overall, the Ibovespa accumulates a 14% drop in the year.

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