Ambipar blames former CFO for financial woes | Business

In addition to the filing with the 3rd Business Court of Rio de Janeiro, its U.S.-listed subsidiary, Ambipar Emergency Response, filed for Chapter 11 protection—the U.S. equivalent of Brazil’s judicial reorganization.

About half of the R$10.7 billion debt is held by foreign bondholders—$1.065 billion, roughly R$5.75 billion. This group has hired Houlihan Lokey and Padis Mattar Advogados to represent them in the process. Ambipar, meanwhile, is represented by Galdino, Pimenta, Takemi, Ayoub, Salgueiro, Rezende de Almeida Advogados; Salomão Advogados; and Basílio Advogados. The company also hired BR Partners as financial advisor, which has been scheduling meetings with creditors, according to sources.

The company was already under temporary judicial protection through a prior injunction, which was set to expire on Thursday (23), preventing acceleration of debt maturities. The injunction, requested in September, came after a R$60 million collection demand from Deutsche Bank, even though Ambipar claimed to have nearly R$5 billion in cash. The move triggered widespread distrust and raised questions about the company’s liquidity.

A key issue for any financially distressed company—and particularly for Ambipar, which has faced mounting doubts—is its cash position. In its petition, Ambipar treated cash as secondary, taking the unusual step of submitting a sealed envelope to the judge containing a management report on its current cash flow, classified as confidential. The petition did not address its cash situation or macroeconomic context, such as Brazil’s high interest rates. Creditors are now expected to seek to lift the confidentiality order.

The request for confidentiality covers other documents as well, including lists of the personal assets of executives, employee salary records, and updated bank and investment account statements.

Although it did not provide details on its cash position, the company again blamed its financial crisis on the derivative contract with Deutsche Bank, which could trigger a cross-default clause (where one debt default leads to others). Ambipar explicitly named its former CFO, João Arruda, as responsible. The company said an independent investigation, conducted by FTI Consulting, is underway. Creditors were informed that FTI would audit the company’s cash flow.

A substantial part of the filing accuses the former CFO, who resigned just days before the earlier injunction request, of being responsible for the derivative contract with Deutsche Bank, which the company says is already under criminal investigation. Ambipar also requested that Ricardo Rosanova Garcia, who replaced Mr. Arruda, be appointed as judicial administrator representing the company abroad.

“These and other actions by Mr. João Arruda and those who conspired in his delinquent designs are subject to investigation by the competent authorities, in an inquiry already instituted for this purpose,” the filing states.

The document devotes even more space to justifying why the company filed in Rio de Janeiro, rather than São Paulo, where it is headquartered. The choice has been challenged in recent weeks by creditors including Deutsche Bank, Santander, BTG, and Banco ABC. Ambipar argues that Rio de Janeiro was chosen because most of its revenue originates there.

Contacted by Valor, Mr. Arruda said through his legal counsel that the accusations “find no support in the facts nor in official documents.” His lawyers added that he did not sign the transfer or amendment of the currency-swap contract with Deutsche Bank and denied that he convened an investor meeting in September. Valor has previously reported that executives Thiago Souza and Luciana Barca signed the amendment.