SouthRock filed for bankruptcy protection, as reported in a statement sent to EXAME. It is worth noting that the company owns Eataly and Starbucks in Brazil. Last Tuesday (31), the company filed a order of judicial recovery.
The company's debt currently amounts to R$1.8 billion, according to the document sent to the Bankruptcy Court of São Paulo. See all the details of this situation below.
Why did the company file for bankruptcy protection?
According to the request for judicial recovery, the reasons for the request are the situation of the Brazilian economy. The company highlighted that there is a “low level of confidence” and great instability in the country. High interest rates and exchange rate fluctuations are also cited as reasons.
In addition, SouthRock highlighted that the drops of 90% in 2020, 70% in 2021 and 30% in 2022 also contributed to the situation. There is also mention of the difficulty in accessing credit for working capital.
The pandemic was also one of the reasons that boosted the order, as the company had difficulty keeping physical stores open.
How will the recovery process work?
According to SouthRock, the judicial recovery process has already begun and has the support of external consultants and stakeholders (interested in the company's shares). From now on, the company must undergo some adjustments, such as food with suppliers and stakeholders.
In addition, there will be a review of the number of stores currently operating and the workforce. It is worth noting that these measures are aimed at ensuring that the company is ready to face the current economic cycle.
The judicial recovery also demonstrates the company's responsibility towards the parties involved, such as employees and shareholders, as highlighted by the company in a note. In other words, even in the face of the unfavorable scenario, the brands will continue to operate, simultaneously with the structural adjustments.
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