Creditors approve recovery plan for brewer Petropolis
Brazil | Petropolis’ 5,000 creditors agreed to a recovery plan, which was submitted to the court in September for final approval. In March, the insolvent brewer had filed for what is called a “judicial recovery” – a court-supervised reorganisation – after a massive drop in output and revenue.
The judicial recovery allows Brazil’s third-ranking brewer to be reorganised while deferring the payment of debts. Reportedly, the group has more than 5,000 creditors. When Petropolis filed for judicial recovery, its debt stood at BRL 4.2 billion (USD 810 million) – 48 percent of which is owed to its banks, and 52 percent to its suppliers. However, since asking for bankruptcy protection, Petropolis’ debt has risen to BRL 5.6 billion (USD 1.1 billion).
In serious trouble
According to reports, the brewer of brands including Itaipava, Cabaré, Petra, Crystal, Lokal, Black Princess, Brassaria Ampolis and Weltenburger, sold 31.2 million hl of beer and beverages in 2020. Its output declined to 26.4 million hl in 2021 and 24.1 million hl in 2022. It is on course to produce 21 million hl this year. This compares with an installed capacity of 54 million hl.
Petropolis reportedly holds a 13 percent share of the country’s beer market and claims to account for more than 24,000 direct and 100,000 indirect jobs. It is not just a major employer: Allegedly, it also received approximately USD 3.9 billion in subsidies between 2018 and 2022.
Petropolis hopes to pay down its debt by 2035, it was reported. It has since entered into a sale and lease back deal with Vamos, a rental truck firm, for nearly 3,000 of its trucks. The scheme generated BRL 580 million (USD 112 million) in much needed cash.
