Restructuring offers growth for Moelis in Brazil
Brazil office opened in 2014 and has won several prestigious mandates; firm argues changes to bankruptcy code would boost M&A.
There has been huge interest among international financial sponsors in acquiring Brazilian assets, but the country’s bankruptcy code is preventing deals happening, according to Jório Salgado-Gama, managing director and co-head of Moelis Brazil.
“We have had many financial investors coming to São Paulo in search of buying opportunities given the country’s situation, but it’s very difficult,” he says.
“Once we have explained the regulations, they see that it is a very difficult legal situation and that’s why we haven’t seen many distressed M&A sales.”
Salgado-Gama points to the fact that separating liabilities in divestitures is complex in Brazil. Also, probably the biggest issue is that judges can invalidate any asset sales that occur six months before a company going into judicial review – which is the country’s 2005 bankruptcy protection law.