June 5, 2020 / 3:21 PM / a month ago

Exclusive: Brazilian ethanol firm GVO's bondholders ask to accelerate $750 million in debt - sources

SAO PAULO (Reuters) - The largest bondholders of Brazilian sugar and ethanol company GVO this week requested the acceleration of all its obligations, including $750 million in bonds, forcing the company closer to an in-court reorganization, three sources with knowledge of the matter said.

Among bondholders leading the request against Grupo Virgolino de Oliveira, as the company is formally known, are Argentem Creek Partners, AllianceBernstein and Chilean fund Moneda. The company did not immediately comment on the matter. Argentem Creek declined to comment, and the other bondholders did not immediately comment.

The request was made on Wednesday evening, the sources added. Acceleration of all obligations is available to creditors once a company defaults on bond payments. Of three issues, one has been in default since 2018, a second matures this year and the other in 2022. All bonds are trading at single cents on the dollar.

Grupo GVO has been in restructuring talks with creditors for a long time, but so far bondholders had not taken any measures against the company, the sources added. As the company has not enough cash, creditors expect the acceleration to push GVO closer to an in-court bankruptcy protection, the sources said.

According to two of the sources, GVO is close to receiving a court-ordered credit from the Brazilian government worth about 1 billion reais ($200 million). Bondholders could have access to that credit within an in-court bankruptcy protection proceeding.

Reporting by Tatiana Bautzer; Editing by Steve Orlofsky

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