Judicial recovery challenges B3 companies and distorts market value

Amid a growing default scenario in Brazil, Companies listed on B3 have also appealed to judicial recovery as an alternative to restructuring debt and avoiding bankruptcy. Although the problem reaches mostly, open companies show that the crisis also impacts market giants.

Last week alone, two new developments came back in evidence. On Monday (7), Oi () filed for in the United States and migrate to Chapter 11, similar to the Brazilian judicial recovery. Days later, on Thursday (10), Azul () also obtained in the US, ensuring continuity to the financial restructuring plan approved there.

On the other hand, Gol () with a capitalization plan of R $ 12 billion. However, what caught the attention of the market was the issuance of papers, in the order of trillions, negotiated in lots of a thousand and which generated confusion among investors – and even a temporarily distorted market value.

Companies in judicial recovery remain listed on B3

Even under judicial recovery, companies are listed on the Brazilian stock exchange and active shares negotiation. According to the B3 manual, these companies are excluded from indices such as the, but remain negotiated normally, provided they meet the dissemination and transparency requirements. This space for negotiation, however, tends to attract investors in search of speculative opportunities.

“Companies that enter RJ represent an opportunity for positions sold [estratégia em que o investidor aposta na queda do preço das ações para lucrar com a desvalorização]given that there may be distortions. Temporarily, they negotiate above their foundation value, ”explains Welliam Wang, Az Quest variable income manager, noting that in the early stages of recovery, the value of the shareholder is often zero or negative.“ The priority is by creditors. ”

Fernando Patrian, senior lawyer in Mandaliti’s credit recovery area, also reinforces that the role of these agents is decisive: they approve or reject the meeting, with the right to vote proportional to the amount of credit and their nature. “This decision can determine whether the company goes on restructuring or moving towards bankruptcy.”

It is noteworthy that creditors are legally divided according to the source of credits (labor, suppliers, banks, among others), and that each group has distinct interests to consider. However, when there are disputes or resistance to the proposed plan, prolonging the process, this tends to affect market confidence. “The recommended for the investor is to have the assistance of legal experts, financial and market advisory, as well as diversify investments to mitigate the risks involved,” warns Patrian.

Penny Stock and Distortions

When a listed company goes into judicial recovery, it is common for a massive issuance of actions to occur. This movement, especially in the early stages, can generate and feed speculation in the market and can create a “inflated” perception of the company’s value.

In the case of Gol, the issuance of preferred papers at R $ 0.01 per unit led to the negotiation of assets in lots of 1,000 shares, resulting in apparent prices over R $ 100 in the first weeks – and, at the closing of June 13, even exceeded R $ 700 (See the history in the chart below).

This temporarily boosted the market value of the airline, even after leaving an insolvency process. It is worth remembering that the deadline to exercise subscription rights ends on Monday (14).

Although the case of Gol has drawn attention, this situation was an exception. In the opposite direction, Americanas went into judicial recovery in Brazil in January 2023, with one. Unlike the momentary appreciation observed in the airline, the retailer’s shares immediately plummeted and accumulated a drop of more than 90% over that year, staying at the cents.

“This level of Penny Stock ends up encouraging speculation on the part of individuals,” says Wang, as both Gol and American roles are negotiated for less than $ 1 each. The AZ Quest manager adds that once restructuring, valuation tends to converge with similar companies in the sector, provided the fundamentals are restored. Being considered, for example, the cash generation capacity, the sustainability of the business model, the level of indebtedness, the operational efficiency and even the reputation of the company.

Meisson Eckardt, Legal Director of Safegold, a consultancy specializing in restructuring and business performance, stresses that in the face of distortions generated by speculative movements, it is essential that investors resort to technical methods to evaluate the real value of the company. “With well done analysis, it is possible to understand if the company can recover and how much it really goes.”

For this, he recommends the evaluation of the following indicators:

Between risks and opportunities

Still, there are those who see opportunities in companies in judicial recovery, even if not directly through the stock market. Eckardt notes that many of these companies keep relevant and operational actives such as industrial equipment, customer base and productive units with revenue generation.

“What makes it viable is the possibility of acquiring part of these assets in any auctions or even the whole business through the so -called isolated production units (UPIs), with protection against previous debts,” he explains. In such cases, the recovering company proposes the sale in the plan, the judge authorizes the operation based on the approval of creditors, and the asset is sold in judicial auction or by direct sale.

Both individuals and legal entities need to submit formal proposals and meet the criteria established in the notice. In the case of open companies, the edicts are released to the market and the Securities Commission (CVM).

Oi, for example, resorted to the sale of assets with UPI structure to raise funds. Among the operations, there was the sale of mobile operations for Claro, TIM () and Vivo (), and the sale of participation in Nova Infraco. The amounts collected were directed to the reduction of debt and to make a new judicial recovery, which began in 2024.

Another investment alternative that the executive highlights is DIP Finncing, in which the investor injects resources into the company during the judicial recovery process, with priority in receipt and guarantees about assets. Although it follows similar patterns of transparency and dissemination, this model can be structured by issuing debentures, commercial notes or hybrid instruments.

In addition, this type of financing is often inserted in a broader restructuring plan, which may include corporate reorganization, debt conversion into action and issuing new roles – measures that often lead to the dilution of former shareholders.

Americanas, still in 2023, obtained two such financing: the first, $ 2 billion with BTG Pactual (), which was used over an 18 -month contract; The second, of R $ 12 billion, structured as a staggered contribution by reference shareholders, combining capitalization and convertible loan.

RJ in Brazil, Chapter 11 in the USA

For Fernando Patrian, Mandaliti’s lawyer, despite the advances of, who disciplines judicial recovery in Brazil, there are still points of attention to investors regarding legal certainty to contribute in a company in this situation. “We need to look carefully at the legal and commercial conditions of the company in crisis, demand transparency and have specialized advisors,” he recommends.

He explains that the use of Chapter 11 by Brazilian companies-such as goal, blue and possibly Oi-is due to the greater agility and security offered by US law in negotiation with creditors. “However, in order for decisions made in the US to have an effect in Brazil, it takes recognition by national justice, according to Chapter VI of our law.”