The company’s troubles are also also a stark warning for investors in Brazilian corporate debt. — Bloomberg
SAO PAOLO: Brazilian waste-management company Ambipar Participações Empreendimentos SA is seeking bankruptcy protection, marking the latest corporate collapse to hit credit markets in recent weeks.
Subsidiary Ambipar Emergency Response filed for Chapter 11 in Texas on Monday, while the parent company began proceedings in Rio de Janeiro, according to US court documents.
Ambipar adds to a growing list of flareups that prompted JPMorgan Chase & Co chief executive officer Jamie Dimon to warn that “when you see one cockroach, there are probably more.”
In the United States, auto lender Tricolor Holdings and car-parts supplier First Brands Group filed for bankruptcy last month, shocking investors with their sudden implosion.
Ambipar also went from reassuring investors to bankruptcy in a matter of weeks after some of its lenders called for default amid a spiraling governance crisis.
The company’s troubles are also also a stark warning for investors in Brazilian corporate debt.
In recent weeks, petrochemicals giant Braskem SA saw its bonds tumble into distress while troubles around Banco Master are threatening to spread to companies and pension funds exposed to its debt instruments.
Ambipar had more than 11 billion reais (US$2bil) of loans and other financings on its balance sheet as of the end of June, according to its latest financial report.
Its US dollar-denominated bonds traded at about 13 cents on the dollar on Monday, down from more than 90 cents at the beginning of August, according to Trace prices.
Its shares also cratered giving it a market capitalisation of less than US$200mil on Monday, compared with US$4.4bil a month ago.
Ambipar has faced probes by Brazil’s securities regulator into potential irregularities. — Bloomberg
