Atvos’ court supervised reorganization plan is approved, creating conditions to resume investments

With debt reduction, the company will focus on the expansion and renovation of the sugarcane field to reach maximum milling capacity

Atvos, the second largest ethanol producer in the country, had its court-supervised reorganization plan approved by the São Paulo State Courts, covering all agroindustrial units. After the implementation of the measures provided for in the plan, the company’s total indebtedness will be reduced by more than 50%, reducing the company’s leverage from 7.7 to 3.6 times the value of net debt in relation to its EBITDA.

“With the financial restructuring, Atvos strengthens itself, with legal certainty, to execute its business plan focused on the expansion and renewal of sugarcane fields and in increasing the productivity of industrial units. The production growth will increase cash generation and we will start a new cycle of the company’s valuation”, says Juliana Baiardi, president of Atvos.

The court-supervised reorganization plan provides for new mechanisms that further strengthen Atvos’ governance with the reinstallation of a Board of Directors composed of five directors, three of which are independent. In addition, four advisory committees to the Board will be instituted to deal with specific topics – Agriculture; Compliance; Personnel and Finance, Investments and Auditing. Inspection advisors will also be hired to monitor operational and financial indicators.

Total Adjusted Yield (TAY) of Atvos, an indicator used by the sugar-energy sector to evaluate the level of efficiency of industrial operations, was 93,8% in the 2019/2020 crop. The company’s unit cash cost is one of the best in the industry, with 11.6 USD/lb, considering 73% occupation, which is below the national average of 15,8 USD/lb which has an average occupancy of 87%.

“Our industrial plants are modern and our fixed costs represent about 50%. Therefore, the increase of our production, via expansion and renewal of the sugarcane field, will have direct positive impacts on the company’s EBITDA. Proof of our efficiency is that we have maintained it, in the last harvest, the level of milling in the order of 27 million tons of cane, even with all the restrictions of the period,” reinforces Baiardi.

With the approval, the schedules of payments to creditors are initiated, according to the conditions foreseen in the court-supervised reorganization plan.