2023-12-28 23:40:29
Sequoia, one of the main logistics companies focused on ecommerce in the country, has just reached an agreement with banks in relation to its debt.
The company convinced Santander, ABC Brasil, Bradesco and Votorantim to convert R$320 million of debt into company shares – Santander and ABC Brasil represent around 65% of the total value.
With the completion of the negotiation, the company managed to reduce its total debt by 75% – including the debentures renegotiated in October. If you consider net debt, the reduction was 90%
Sequoia will start 2024 with a debt of R$183 million and interest payment grace periods of three to eight years, depending on the creditor. Leverage fell from 5.8x equity to 0.1x.
Sequoia now has several key shareholders with stakes above 10%: the managers Newfoundland Capital Management and Jive, in addition to the banks ABC and Santander.
The contract signed with the banks marks the end of a semester in which the company became more remembered for the explosion of debt (and late payments) than for the business itself.
Two months ago, Sequoia concluded its issuance of R$341.5 million in debentures (the fourth since the IPO) with the migration of R$242 million from delayed simple debentures – 79% of the total – to debentures convertible into shares.
The remainder, around R$100 million, went directly to the company’s cash flow to be applied to the operation.
“It was a herculean effort by the company and the result was very promising, as we maintained the company’s key assets, as well as all partners and customers,” Eric Fonseca, Sequoia’s new chairman, told Brazil Journal.
Fonseca, who is also the portfolio manager of Newfoundland, was not the only change in board da Sequoia.
The company said that Marcelo Martinspartner at Jive, and Marcelo Torresi, former CEO of Socopa and Banco Paulista, are also joining the board. The other two vacancies will continue with the founder and CEO Armando Marchesan e Sergio Saraivathe former CEO of Rappi in Brazil.
According to the new chairmanthere will be no changes to the executive board.
Now, Sequoia will have to convince the market that the operation will stop with the renegotiation of the debt.
In the third quarter, Sequoia reported a 72% drop in net revenue year-on-year to R$147.8 million. EBITDA, in turn, went from a positive R$67.4 million to a burn of R$152.2 million.
The company reported that revenue was already recovering in August and September, and Fonseca said that the movement continued in the fourth quarter, but he does not know whether this will represent a sequential increase.
Sequoia is one of the companies that debuted on the stock exchange during the pandemic, with a terrible performance since then. Since the IPO, the company has lost 97% of its market value, and the stock now trades at R$0.38, with the company worth R$134 million on B3.
At its peak, the company delivered one of every six Brazilian e-commerce orders, and its shares traded at R$30. Then came a series of problems: falling retail sales, rising interest rates (which made debt skyrocketed) and the interruption of credit lines for the risk drawn following the fraud at Americanas, which directly affected the company’s cash flow.
According to Fonseca, in addition to the perfect storm, the company also invested in business lines that were far from being a good idea, such as the transport of heavy products, such as white and brown goods.
This year, Sequoia set aside delivery of these products to focus on items weighing up to 12.5 kilos, and this will continue to be the focus of the business going forward.
Fonseca does not see a strong recovery in retail next year, but predicts that the company will be able to deliver results regardless of the macroeconomic scenario.
André Jankavski
1703906015
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