The shares of Grupo Toky (), owner of furniture stores Tok&Stok and Mobly, suffered a sharp drop this Tuesday after the company reported that it had filed for judicial recovery, with debt exceeding R$1 billion.
The company cited a challenging macroeconomic environment, especially for the furniture and decoration retail sector, characterized by factors such as still high interest rates and a higher level of household debt.
The company’s shares closed down 41.38%, at R$0.17. Year-to-date, shares have depreciated by around 80%. According to the process presented by the company, the debt totals R$1.12 billion.
“Despite the efforts made by management in negotiating debt restructuring with the creditors of the subsidiary Tok&Stok, the group’s high indebtedness persists and has been getting worse”, stated the company in a material fact to the Securities and Exchange Commission (CVM).
This circumstance, he added, “requires the urgent adoption of additional measures aimed at preserving its activities, protecting its liquidity and allowing the implementation of an orderly restructuring of its debt and capital structure”.
The company added that temporary restrictions on inventory levels are having a significant impact on short-term liquidity.
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The company said that the request for judicial recovery, authorized by the board of directors as a matter of urgency, seeks to “protect the company and its subsidiaries, enable the continuity of their activities, preserve the services they provide, preserve their value and their social function, as well as create conditions for the negotiation and implementation of an appropriate solution for their obligations”.
The request was filed before the Bankruptcy and Judicial Recovery Court of the Central Civil Court of the State of São Paulo, under judicial secrecy.
