By Brazil Stock Guide — Pressured by a heavy debt burden and rising default risk, Oncoclinicas (ONCO3) is racing against time to reorganize its balance sheet and avoid a potential default as the market discusses the possible entry of Porto Seguro (PSSA3) as a strategic investor.
The investment possibility gained momentum after reports that Porto had submitted a proposal to inject roughly R$1 billion into the company, according to Brazil Journal. After the information leaked, Oncoclinicas confirmed on Sunday (Mar 15) that it had signed a preliminary memorandum of understanding (term sheet) with the insurer to evaluate a potential strategic transaction.
The financial turmoil has also triggered a rapid reshuffle in the company’s leadership. During a board meeting held Sunday, directors formalized the resignation of Camille Loyo Faria from her roles as executive vice president, chief financial officer and head of investor relations. She had been hired in February specifically to lead the company’s financial restructuring process.
In the same meeting, the board appointed Marcel Cecchi Vieira to simultaneously assume the roles of executive vice president, chief financial officer and head of investor relations.
Investment Structure Under Discussion
According to the company, the memorandum signed with Porto represents only a preliminary stage of negotiations and does not constitute a binding commitment between the parties.
Any eventual transaction still depends on due diligence, negotiations over definitive agreements and internal approvals.
The structure under discussion would involve separating Oncoclinicas’ roughly 200 oncology clinics into a new subsidiary, in which Porto Saúde would inject about R$1 billion.
Half of the amount would be invested as equity and the other half through a convertible debenture, a structure that could grant the insurer roughly 33% of the economic interest and 66% of the voting shares of the new entity.
Hospitals and international operations would remain outside the structure, while the clinics — responsible for most of the company’s EBITDA generation — would form the core of the new business.
Divided Board
The memorandum of understanding was approved by majority vote at a board meeting held on March 13, but two directors voted against the transaction: Marcos Grodetzky and Raul Rosenthal Ladeira de Matos.
The dissenting votes highlight internal disagreements over the terms and risks of the potential deal as the company navigates its financial restructuring.
Leadership Change
The financial turmoil has also prompted swift leadership changes.
Earlier in March, Carlos Gil, previously the network’s medical director, took over as interim CEO, replacing company founder Bruno Ferrari, who remained on the board of directors.
Mounting Debt Pressure
The possible transaction with Porto comes at a moment of intense financial pressure for the company.
Fitch Ratings recently downgraded Oncoclinicas’ national long-term rating to C(bra), a level indicating extremely high default risk.
According to the agency, the company faces limited liquidity to meet upcoming debt maturities, with projected cash below R$100 million by the end of 2025, compared with R$745 million in debt due in 2026 and R$810 million in 2027.
Net debt currently stands at roughly six times EBITDA, while Fitch projects negative operating cash flow of around R$600 million.
Next Steps
Oncoclinicas has called meetings of debenture holders to discuss a standstill agreement, a mechanism that temporarily suspends debt payments while the company negotiates a broader solution with creditors.
The meeting scheduled for March 24 will be one of the next key tests for the company.
For sector analysts, the combination of creditor negotiations, the possible entry of a strategic investor and internal governance disagreements suggests that the coming weeks will be decisive in determining the future of the oncology network.
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