Brazilian fertilizer company Fertilizantes Heringer SA has decided to close several of its plants and distribution centers as part of a restructuring plan to lower its debt burden, two sources told Reuters on Thursday.
Heringer, one of the largest players in the Brazilian fertilizer market, sent a message to workers on Thursday in at least 10 installations, including plants and regional offices, advising them that they faced closure, according to a e-mail message seen by Reuters.
In the message, CEO Dalton Carlos Heringer said the restructuring became necessary after some creditors obtained a favorable court decision allowing them to freeze bank accounts to guarantee debt repayment.
Heringer's press office did not confirm the existence of the memo and said it would return a call seeking details. Its investor relations office said company executives were not available for comment as they were in meetings and that the company might send information to market regulator CVM later on Thursday.
Heringer had 2.9 billion reais ($794.17 million) in debt by the end of the third quarter, according to its earnings release. That compares with a market capitalization of 224 million reais, according to Refinitiv data.
A source that deals with fertilizer distributors in Mato Grosso, in the heartland of Brazil's grain belt, said Heringer advised some of those distributors regarding what plants and offices were being closed and which ones would keep operating.
Before the closings, Heringer was operating 16 plants that produce fertilizer from imported materials and one sulfuric acid plant, besides regional offices in the most important agricultural areas in Brazil such as center-west and Matopiba.
It had a capacity to move 6.2 million tonnes of fertilizer per year, used in several types of cultures including soybeans, corn, cotton, coffee and sugar cane.
Heringer shares lost 5 percent in Sao Paulo trading on Thursday.