Brazilian Ambipar Bankruptcy Filing Cites 'Irregularities'

Ambipar's bankruptcy filing in Brazil cites "irregularities". The company, which provides oil and gas industry services, filed for bankruptcy after its Brazilian subsidiary was investigated for irregularities. Ambipar's assets and liabilities have been frozen, and the company has requested protection from creditors.

Brazilian waste-management company Ambipar Participações e Empreendimentos SA has filed for bankruptcy protection in Brazil, citing "irregularities" discovered in the contracting of swap transactions by its Finance Department. The company's subsidiary, Ambipar Emergency Response, also filed for Chapter 11 bankruptcy protection in the United States.

The move follows a series of setbacks for Ambipar, including probes by Brazil's securities regulator into potential irregularities in the company's share buyback program. The regulator had previously dismissed allegations of coordinated purchases between CEO Tercio Borlenghi Junior and Brazilian tycoon Nelson Tanure. The company's bonds and shares have been severely affected by the revelations, with concerns over compliance probes, governance issues, and executive exits mounting Brazil’s Ambipar seeks bankruptcy in latest credit market jolt^[1].

Ambipar's bankruptcy filing was prompted by a loss of market confidence and early debt-repayment requests from creditors, which posed a risk of cross-default on the company's other financial obligations. The company had previously obtained an injunction blocking creditors from demanding accelerated payment, but the measure was not sufficient to prevent a larger crisis of confidence and liquidity problems Brazil's Ambipar files for bankruptcy protection^[2].

Ambipar had been pursuing international expansion, but struggled to integrate newly acquired assets and manage its growing financial complexity amid management turnover. UBS analysts warned that the company's Response division, which specializes in emergency and environmental incident services, depends heavily on operational reliability. Any perception of financial instability or internal disorganization could erode client trust and threaten contracts Brazil's Ambipar files for bankruptcy protection^[2].

The company's assets and liabilities have been frozen, and it has requested protection from creditors. Ambipar's Brazilian subsidiary listed liabilities of between US$100 million (RM422.6 million) and US$500 million and estimated the value of its assets from US$1 billion to US$10 billion in its bankruptcy filing Brazil’s Ambipar seeks bankruptcy in latest credit market jolt^[1].

S&P Global Ratings lowered the company's rating by multiple notches, to D from BB-, calling the request for protection the "equivalent to a general debt restructuring of Ambipar's obligations" Brazil’s Ambipar seeks bankruptcy in latest credit market jolt^[1].