Brazil's GPA files for $871 million debt restructuring plan

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Brazilian food retailer GPA BMFBOVESPA:PCAR3 said on Tuesday it has reached an agreement with its main creditors for an out-of-court debt restructuring plan totaling about 4.5 billion reais ($871.23 million), sending its shares lower.GPA, which runs supermarket chain Pao de Acucar, has long struggled with an elevated debt load and had previously pledged to cut investments, expenses and slow store openings this year to trim what it described as a bloated structure.A broader restructuring, however, appeared imminent in recent days as the company acknowledged it had been in talks with creditors to renegotiate debt and short-term obligations, and had hired advisors to assist in those discussions.Shares in GPA, formally known as Companhia Brasileira de Distribuicao SA, fell as much as 9% in early Sao Paulo trading, before paring some losses. The benchmark Bovespa index BMFBOVESPA:IBOV rose 0.4%.The out-of-court restructuring will not affect current obligations with suppliers, partners and customers, nor labor-related commitments, GPA said in a securities filing, vowing to keep meeting those obligations.Stores are expected to continue operating normally, it added.MANAGEMENT CHANGESThe debt restructuring adds to shareholder and management shifts the company has undergone since last year, when the Coelho Diniz family became its top shareholder - a position previously held by France's Casino EURONEXT:CO, which still owns 22.5% of the firm. In October, businessman Andre Coelho Diniz was elected chairman. Shortly afterward, CEO Marcelo Pimentel - who had led the firm since 2022 - resigned. In early 2026, Alexandre Santoro was elected chief executive.GPA said the restructuring plan is "an important step toward strengthening the company's balance sheet and improving its debt profile." The plan takes immediate effect and was initially approved by creditors holding 46% of total claims. Analysts at JPMorgan said in a note to clients that they welcomed the efforts to restructure debt and support business continuity, but maintained an "Underweight" rating on GPA due to challenging operating and leverage trends.($1 = 5.1651 reais)

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