Brazil's Pinheiro Neto Advogados has helped water company CAB Ambiental, a subsidy of the Galvão conglomerate, restructure 255 million reais (US$83 million) worth of debt.
A group of investors led by private equity company IG4 Capital acquired 186 million reais (US$60 million) worth of CAB's debt and converted them into shares. These were then transferred to the investors, which made a further cash investment of 70 million reais (US$22 million) through the newly created Iguá fund.
Banco Votorantim and Banco Bradesco, two of CAB's main creditors, both held debentures issued by the company.
Votorantim's debentures were exchanged for shares in CAB Ambiental, while Bradesco assigned its credits to a private equity fund at a discount, and used the proceeds to pay for a capital increase in CAB. Both banks called on Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados.
CAB now operates as Iguá Saneamento, which has announced it will invest over 1.4 billion reais in water and sewage systems over the next seven years.
The deal closed on 20 July.
It has been reported that CAB's restructuring was a response to BNDES cutting financing for the company's investments, after the Galvão group was implicated in the Lava Jato investigations.
Counsel to CAB Ambiental
Pinheiro Neto Advogados
Partner Eduardo Paoliello and associates Leandro Vivarelli Molina, Luis Arthur Terra Alves, Mariana Alonso Thomazelli, Fernando Pacheco Di Francesco, Luiz Fernando Lockmann, Otávio Balero Pereira and Marcello Pompílio
Counsel to Banco Votorantim and Banco Bradesco
Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados
Partner Bruno Tuca and associates Carlos Henrique Araújo and Marco Saliba