By Brazil Stock Guide — Latache, one of Oncoclínicas’ largest shareholders, said it was “completely opposed to the terms of the out-of-court restructuring” being negotiated with the company’s creditors, according to a statement sent to Brazil Stock Guide. The asset manager considers the proposed conditions excessively favorable to creditors and favors a court-supervised restructuring if the terms currently under discussion remain unchanged.
The proposal under negotiation includes a haircut of approximately 45% on part of the debt being restructured, as part of a broader effort to address roughly R$5.1 billion in financial obligations. The final terms, including how they would apply to different creditor groups, remain subject to negotiation.
Despite its shareholding, Latache has no representatives on Oncoclínicas’ board of directors. The asset manager said its nominees failed to secure enough votes to be elected, as recorded in the minutes of the shareholders’ meeting.
The statement comes amid a governance dispute at the Brazilian cancer treatment network. The resignation of board member Paulo Roberto Belém Junior on September 30 triggered the need for a new election of the entire board, whose members had been chosen under Brazil’s cumulative voting system.
Under Brazilian corporate law, the departure of a director elected through cumulative voting, without an alternate, requires the entire board to be re-elected. Until new directors are chosen, the remaining board members continue to serve on an interim basis. A shareholders’ meeting to elect the new board has been scheduled for November 6.
The board changes come at a critical stage in the company’s financial restructuring. On October 13, Oncoclínicas informed Brazil’s securities regulator, the Comissão de Valores Mobiliários (CVM), that its out-of-court restructuring plan remained under negotiation and could be amended before its final submission to the courts.
The clarification followed a regulatory inquiry into a report by Valor Econômico that the company had secured support from approximately 70% of its creditors, above the threshold required for court approval of the plan, provided the statutory approval requirements for each category of covered claims are met.
On Wednesday (October 14), a São Paulo court granted the company an additional 15 days to demonstrate that creditors holding more than half of the claims covered by the plan had agreed to its terms, subject to the applicable legal requirements. The original deadline expired on Tuesday (October 13) without the company submitting the final supporting documentation.
Agreement with Oncoprod
One of the most significant negotiations involves Oncoprod, a major pharmaceutical supplier to Oncoclínicas, which is owed approximately R$1.2 billion. The distributor negotiated separate terms providing for repayment without a haircut, with payments scheduled to begin in 2027.
The agreement also provides for the resumption of drug supplies on 90-day payment terms, potentially covering up to R$600 million in transactions. The arrangement is considered important for ensuring continuity of cancer treatments after financial difficulties led to restrictions on drug deliveries to the network.
The terms negotiated with Oncoprod illustrate the complexity of the restructuring, which involves creditors with different security arrangements, repayment schedules and commercial interests. Separate agreements have also been reached with banks. While some creditors are seeking to preserve the value of their claims and maintain commercial relationships, others are discussing alternative repayment structures, maturity extensions and potential debt reductions.
CRI investors and creditor negotiations
Negotiations with holders of Brazilian real estate receivables certificates (CRIs), a type of asset-backed security, represent another front in Oncoclínicas’ out-of-court restructuring. The investors, represented by Opea Securitizadora, retained law firm Mattos Filho as legal adviser and Journey Capital as financial adviser. The first bondholder meeting, scheduled for September 23, failed to reach the quorum required to deliberate on the restructuring plan.
The difficulty in securing sufficient participation from CRI holders came as Oncoclínicas made progress in negotiations with other creditors, including debenture holders and suppliers. The company is seeking the creditor support needed for court approval of the out-of-court restructuring, a process that can also bind creditors covered by the plan who have not individually agreed to its terms.
Mattos Filho has also represented Goldman Sachs in discussions concerning a mandatory public tender offer for Oncoclínicas shares, known in Brazil as an OPA. The law firm’s involvement in different aspects of the crisis highlights the complex relationships among investors and creditors involved in the company’s financial restructuring and corporate disputes.
Shareholder dispute
The dispute over the tender offer is another source of tension among shareholders. In August, the CVM determined that Josephina III, a fund linked to Centaurus Capital, was required to launch a public tender offer for Oncoclínicas shares following a corporate restructuring involving investments previously associated with Goldman Sachs. The U.S.-based investment manager is challenging the decision through arbitration.
Latache, which holds approximately 14.6% of Oncoclínicas’ share capital, is among the shareholders seeking the tender offer. The asset manager has also requested a shareholders’ meeting to consider suspending Josephina III’s voting rights, intensifying the dispute over the company’s governance.
Latache’s opposition to the terms of the out-of-court restructuring adds another layer to Oncoclínicas’ crisis. Beyond addressing its debt burden, the company must reconcile the interests of different creditor groups while navigating shareholder disputes and the election of a new board of directors.
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