Bloomberg Línea — Americanas (AMER3), which is engaged in a bankruptcy and restructuring process, has become the target of an eviction action in a São Paulo court concerning a debt of 67,606 reais ($13,285) in unpaid rent, according to a court document seen by Bloomberg Línea.
The lawsuit filed by the Tivoli Shopping Center in the 3rd Civil Court of Santa Barbara D’Oeste, in São Paulo, is for “eviction for non-payment”.
Tivoli Shopping is managed by AD Shopping, the largest privately held shopping center management company in Brazil, with 42 developments across the country, and its portfolio includes the Metrô Tatuapé and Penha malls, both of which are located in eastern São Paulo.
In response to Bloomberg Línea’s request for comment, the developer said it “does not comment on contractual issues related to its developments”.
The retail giant filed for bankruptcy and restructuring in the 4th Business Court of Rio de Janeiro on January 19, declaring at the time a debt of 43 billion reais ($8.44 billion), after the discovery of “accounting inconsistencies” of around 20 billion reais.
Last week, Americanas disclosed that its debt stands at 41.2 billion reais with 7,720 creditors.
With around 2,400 physical stores throughout Brazil, Americanas occupies prime space in many shopping malls as an anchor store.
Among Americanas’ largest debts with malls mentioned in the list of creditors sent to the courts in Rio de Janeiro are with Pantanal (2.58 million reais), Iguatemi (742,000 reais), Center Shopping Rio (619,500 reais), Plaza Sul (582,000 reais) and ABC (660,400 reais), among others.
Watch the Bloomberg Línea editorial team in Brazil act out the saga that has unfolded between Americanas and its creditors (in Portuguese):
What Americanas says
In a note sent to Bloomberg Línea, Americanas said that “the amounts of rents due and unpaid until the date of the request for restructuring constitute debts that will follow the requirements of the process, which prevents it from making payments whose origin was prior to the beginning of the request made”.
The company added that it will still negotiate with its creditors.
“For events that took place the beginning of the restructuring process, the company’s operation will continue as normal. Americanas reinforces its commitment to seek a short-term solution with its creditors,” the retailer said.
Impact of the rent arrears
The lack of rent payments by Americanas should not represent a significant pressure on the revenues of shopping center operators, Fitch Ratings said in a report.
“Brazilian malls have a low risk of exposure to individual tenants, given the fragmented nature of their customer base. The top 10 tenants generally represent less than 20% of the annual rent base,” the rating agency said.
According to Fitch, rents account for approximately 70% to 75% of mall companies’ revenues, with the remainder composed primarily of parking and services.
“The companies’ operating and credit metrics would not be materially affected if Americanas were not able to meet its rent obligations,” Fitch said.
On Brazil’s B3 stock exchange, the shares of publicly traded shopping center operators show that the Americanas crisis has not yet taken a toll. The shares of Aliansce Sonae, which recently merged with brMalls, have risen 6.47%, while the shares of Multiplan have climbed 5.48%, and those of Iguatemi 1.51%, below the Ibovespa’s cumulative gains (+2.90%) between the beginning of January and January 27.
In the real estate investment trusts segment, the situation is different, however.
Managed by BTG Pactual, LVBI11, a logistics fund with a net worth of over 1.5 billion reais ($295 million), is being affected by Americanas’ default, since the fund’s portfolio includes 70% of the capital of the company Aratulog Armazenagem, of which Americanas is a tenant of its warehouses in Salvador, in Bahia state.
The fund’s share have dropped 8.86% this month.
According to analyst Danilo Barbosa, director of research at Clube FII, the list of the largest real estate investment funds owed by Americanas also includes CSHG Logística, with a debt of $5.4 million reais, Vinci Shopping Centers, with a debt of 4.2 million reais, Hedge Brasil Shopping, with a debt of 1.5 million reais, XP LOG FII, with an 850-million-reais debt, and Shopping Parque Dom Pedro, with a debt of 737,000 reais, as well as Bresco Logística, with debts of 667,000 reais, XP Malls FII, with a 670,000-reais debt, ANCAR IC, with a debt of 619,000 reais, and FII Max Retail, which Americanas owes 514,000 reais.
Translated from the Portuguese by Adam Critchley