(Bloomberg) — Brazilian renewable energy company Rio Alto Energias Renovaveis SA is working with financial advisory firm Laplace Finanças and law firm Felsberg Advogados as debt restructuring advisers, according to people familiar with the matter.
Laplace and Felsberg have been helping Rio Alto negotiate with its creditors to reach an agreement as the company seeks to avoid filing for bankruptcy protection, the people said, asking not to be named because the discussions are private.
The company, a Sao Paulo-based renewable energy construction firm that builds and operates solar energy projects, filed a precautionary measure for 60 days in February to shield itself from creditors, and has received a extension of the standstill period for an additional 60 days, the people said.
Rio Alto didn’t respond to messages seeking comment.
The renewable energy sector has been under stress in Brazil, with several companies struggling financially, cutting costs and restructuring debt. Power output is being limited by the grid operator due to oversupply, low demand and limited transmission capacity, at a time when interest rates have reached two decade highs.
Fitch Ratings downgraded Rio Alto’s local notes to D from AA after the company missed a scheduled interest payment in April that was suspended by the court, even though bank guarantees were still valid.
“Although the debentures are backed by irrevocable, non-retractable, and proportional guarantees from Banco BTG Pactual S.A, Banco Sumitomo Mitsui Brasileiro S.A, and Banco Alfa de Investimento S.A. (Banco Alfa), a precautionary measure annulled the early maturity declared by the trustee, which prevents the enforcement of the guarantees,” Fitch said in a report.
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