Brazilian waste management company Ambipar filed for bankruptcy protection against its creditors on Monday night in a Rio de Janeiro court, as it struggles to service its BRL10.7 billion ($2 billion) in debts, while its Cayman-based subsidiary Environmental ESG also filed for Chapter 11 in the United States.
Ambipar’s shares tumbled 29% on Tuesday on São Paulo’s B3 stock exchange, taking the decline to 97% over the past month.
Ambipar, which announced numerous local and international acquisitions after its 2021 initial public offering, issued a $750 million green bond in January 2024.
It has been locked in a dispute over derivative contracts with Deutsche Bank, however.
The company said its financial downfall is “a result of a series of events triggered after the discovery of indications of irregularities in the contracting of swap transactions by the financial department and the abrupt resignation of the former chief financial officer. These events caused a severe loss of market confidence in the Ambipar Group and led some creditors to request the early maturity of debts, creating a concrete risk of cross-default on other group obligations.”
According to a previous ruling by a Brazilian court, Deutsche Bank had demanded additional guarantees for loans from Ambipar, creating “an imminent and concrete risk” for the company. Audit company Deloitte also said there were potential irregularities in Ambipar’s second quarter financial results.