Correios are in a race against time to raise R$ 10 billion and could lay off 10 thousand

Immersed in financial difficulties, Correios is racing against time to raise at least R$10 billion in 15 days. Resources are needed to balance the books and recover operational capacity to be able to save ourselves from a scenario that could become even more catastrophic. The expectation of the state company’s management is to obtain the amount via loan, with a guarantee from the Union, by the end of the month.

The amount corresponds to half of the R$20 billion that the state-owned company initially aimed for, but it was forced to review its strategy given the high cost charged by banks in the first round of negotiations for the company led by Emmanoel Rondon.

The arrival of the loan is also essential to get Correios’ expense adjustment initiatives off the ground. The main focus is to reduce personnel costs. The idea is to propose a Voluntary Dismissal Program (PDV) to reach 10 thousand employees. This, however, comes at a cost.

In the last PDV, out of a potential audience of 8 thousand employees who expressed interest in leaving the company, only 3.6 thousand signed up.

The assessment by the company’s current management is that, this time, it will be necessary to offer conditions to reach the target of 10 thousand layoffs. The idea is to convince these workers that it will be advantageous to leave the company with the POS. The goal is to reduce the payroll by R$2 billion per year.

The objective now is to obtain the maximum amount of loaned resources, but with a financial cost of up to 120% of the CDI (which follows the Selic rate), a limit normally considered in operations guaranteed by the Union. The state-owned company sent the proposal to a group of around ten banks and expects a response by the end of the month.

With the reduction in the loan value, the company hopes to increase the credit offer, including smaller banks in the conversations.

In the first round, the rate charged by banks BTG Pactual, Citibank, ABC Brasil and Banco do Brasil was considered too high for an operation that will be endorsed by the National Treasury — that is, if the company does not pay, the Union bears the cost. The risk for financial institutions, in practice, is zero. When contacted, the banks did not comment on the matter.

Banks union

The cost of the offer reached 136% of the CDI, which would entail a cost of around R$3 billion per year in interest alone, according to an interlocutor involved in the negotiations. The body’s Guarantee Committee establishes a maximum acceptable cost for an operation to be eligible for the Union guarantee, which is currently 120% of the CDI.

The percentage is not a restriction in itself, but a practice used by the agency to avoid excesses in credit operations with state-owned companies and subnational entities. Loans to states under a fiscal recovery regime, for example, do not observe this limit, because they are naturally riskier.

In the case of Correios, however, the idea is to pursue this parameter. Therefore, the state-owned company opened a new round of negotiations and expanded the list of banks consulted. In the proposal, the company said it wants to raise up to R$20 billion, with a maximum rate of 120% of the CDI.

In this context, it is considered reasonable to obtain at least R$10 billion in the short term given the interest expressed by financial institutions and to do another round to obtain the remainder later on.

It is possible that the operation will be carried out with a syndicate of banks, the same model as a loan that the state-owned company previously contracted with Citibank, BTG and ABC Brasil.

To avoid future questions, Correios management has already met with the Federal Audit Court (TCU) and presented the general lines of its restructuring plan so that the court can monitor the process from the beginning.

The loan money is considered necessary to balance the company’s cash flow, pay outstanding debts and commitments, in addition to putting the company’s restructuring plan in place.

The company recorded an accumulated loss of R$4.3 billion in 2025. In the second quarter alone, between April and June, the negative result reached R$2.6 billion, almost five times that recorded in the same period of the previous year, of R$553.1 million. Furthermore, the monthly cash loss has been around R$750 million.

Delay in deliveries

When publishing its financial statements, the state-owned company highlighted that it faces economic and competitive challenges and cites financial restrictions.

Balancing the accounts is seen by the company as essential, for example, to regularize the situation with suppliers, who are not being paid, and, consequently, deliveries, which are arriving later than desired. The internal diagnosis is that the state-owned company’s situation generates a snowball, which translates into fewer contracts and loss of revenue.

Currently, the on-time delivery rate is 92% and the company considers that it needs to exceed 95% to avoid losing customers and obtain new contracts. The state-owned company has already achieved a recovery in relation to the worst moment of the operation, when the index reached 76% in the first half of the year, but the assessment now is that a further improvement depends on the company’s financial situation being addressed. This would give more peace of mind when negotiating with large clients, such as e-commerce platforms.

Retained Resource Risk

The attempt to raise resources also faces problems from previous operations. The company intends to pay off a R$1.8 billion loan already contracted with Citibank, BTG Pactual and ABC Brasil, the cost of which jumped significantly after breaching a contractual clause.

Originally, the rate charged was CDI (which is close to Selic) + 3%. In October, the additional was 4% and, in November, 5%, until the company obtains a contribution from the Union or a loan backed by the Treasury. Citibank said it would not comment. The other institutions did not comment.

The increase in interest was due to a breach of contract in relation to the stock of court orders (judicial debts for which there is no longer any appeal). Therefore, Correios had to renegotiate the agreement, under worse conditions.

An amendment of R$40.5 million was signed to make the adjustments, payment of which must be made in two installments, on November 28th and December 28th. Banks, however, can retain the amounts in the contract’s escrow account from tomorrow, the 15th.

Another loss to the company due to non-compliance with the contract was the early payment of the principal amount of the loan. Previously, it would be in June 2026.

The contract, signed on May 26th with the banks BTG Pactual, ABC Brasil and Citibank, provided that if the company’s stock of court orders, “at any time”, exceeded R$900 million, it would activate a “mandatory advance payment” clause of the total value of the loan, also considering interest and monetary correction.

At the end of the second quarter, the account for court orders and Small Value Requests (RPVs) reached R$2.051 billion, which prompted the banks to notify the company.

The additive is valid for the second and third trimesters. From the fourth quarter onwards, Correios will once again have restrictions in relation to the stock of court orders, which cannot exceed R$2.5 billion “at any time”.

Understand the thread of the company’s crisis

• Continuous drop in revenue, increased costs and loss of efficiency deteriorate the state-owned company’s cash flow.
• Having difficulty closing its accounts, the company went to the market in search of a R$20 billion loan.
• The high cost of fundraising and the difficulty of affording the requested guarantees halted the conversations.
• The company is now looking for a new solution and has started a new round of negotiations. The objective now is to raise R$10 billion within a 15-day horizon to meet the expected payments.
• But there are other problems on the radar. In a previously contracted credit operation, the company breached a contractual clause and saw interest rates increase.
• An amendment made to the contract under less advantageous conditions increased expenses by R$40.5 million, and the state-owned company is at risk of having resources withheld from tomorrow.