Agrogalaxy anticipates full payment to creditors in judicial reorganization plan

Date:12-12-2024

Brazilian input distributor AgroGalaxy informed the market that it had filed its judicial reorganization plan with the Court of Goiás state. 

In a 1,262-page document, the company explained the reasons behind its crisis, as well as its economic and operational viability, debt restructuring, and other details.

In a material fact communication disclosed to the public, AgroGalaxy stated that the plan "anticipates full payment, without any discount, of credits owed to creditors, suppliers, labor creditors, and rural producers who qualify as AgroGalaxy group partners, with specific deadlines for each category."

In its judicial reorganization request, AgroGalaxy pointed to a total liability of BRL4.67 billion. Among approximately 2,500 creditors, one of the largest is Vert Companhia Securitizadora, the issuer of AgroGalaxy's Agribusiness Receivables Certificates (CRAs), totaling BRL516.4 million.

However, AgroGalaxy's proposal establishes "subcategories" within these classes that will have more favorable conditions, either in terms of deadlines or payment discounts. Rural producers who had grains deposited in the company's warehouses, for example, will be at the front of the line, as will suppliers who maintained business with the company after September 18, the date the company filed for judicial reorganization.

Among suppliers, AgroGalaxy is offering payment without discount, but only for those who maintained commercial relations with the company in recent months. The proposal provides a two-year grace period and full payment over the following eight years, provided that, in addition to approving the Judicial Reorganization Plan, they agree not to litigate against AgroGalaxy and maintain a supply level that meets the company's demands throughout the reorganization period, with 100% deferred sales.

Among financial creditors, there is also a distinction between "partners" – those who kept credit lines open – and those who closed their doors to the company. For amounts proportional to the credits granted, "partners" will receive a payment within 11 years, with two years of grace, without discount.

Financial Statements

In the second quarter of 2024 (2Q24), the company reported an adjusted loss of BRL362.4 million, a 40.9% deterioration compared to 2Q23. The company's total net revenue, including inputs and grains, fell 42.4% against 2Q23, standing at BRL1.056 billion. Input revenue dropped 58% to BRL200.9 million, while grain revenue declined 36.8% to BRL855 million.

The publication of the company's third-quarter 2024 (3Q24) balance sheet was originally scheduled for November 23 but has been postponed to December 19.

(Editing by Leonardo Gottems, reporter for AgroPages)