Casas Bahia challenges GPA restructuring over R$231.7m debt

Retailer Casas Bahia has filed an objection in court against the out-of-court restructuring plan of GPA, the owner of supermarket chain Pão de Açúcar. The dispute centers on a credit of R$ 231.7 million that Casas Bahia claims it is owed by GPA, which stems from labor liabilities recorded under Casas Bahia's tax registry but allegedly originating from GPA obligations. The claim was previously part of three arbitrations between the two companies.

GPA is seeking to restructure approximately R$ 4.5 billion in debt. Casas Bahia argues that GPA grouped financial and non-financial creditors together, including banks, investment funds, debenture holders, and judicial claimants, which it claims undermines the validity of the vote. Casas Bahia also questioned whether supporting creditors truly represented 57.49% of the debt, while contesting the generic exclusion of R$ 392 million in liabilities and another R$ 115 million in uncertain or unliquidated lawsuits.

The São Paulo Public Prosecutor's Office previously opposed ratification, pointing to a lack of homogeneity among creditors and concentration among financial institutions, including Itaú. However, Judge Larissa Gaspar of the 3rd Bankruptcy Court of São Paulo ruled that those issues were not sufficient at that stage to block ratification, ordering creditors to submit concrete objections. Casas Bahia met that deadline, though sources close to the case say it would accept the plan's proposed terms if its challenge fails.

Under GPA's proposed term sheet, Option A offers up to R$ 2.63 billion in unsecured debentures across two series. The first series, of up to R$ 1.5 billion, pays the DI rate plus 2.5% annually, with interest starting in March 2027 and principal amortized between 2028 and 2031. The second series, of up to R$ 1.13 billion, carries the same rate and can be converted into GPA shares across four windows between 2027 and 2031 at a 20% discount to the 90-day volume-weighted average price.

On 15 September, the São Paulo Commercial Workers Union urged the court to prioritize approval, noting that GPA employs approximately 35,000 workers. GPA is also a creditor in Casas Bahia's own court restructuring, which was filed on 17 August and partially accepted, holding roughly R$ 700 million in tax credits related to PIS and Cofins while pursuing arbitration over Casas Bahia's attempt to sell those receivables.