UPDATE 1-Brazil's GVO bonds sink on restructuring fears

lunes 20 de octubre de 2014 16:31 GYT

(Adds Fitch downgrades GVO two notches to CC)

By Davide Scigliuzzo

NEW YORK, Oct 20 (IFR) - Grupo Virgolino de Oliveira (GVO) bonds slid deeper into distressed territory Monday as the cash-strapped Brazilian sugar and ethanol giant gets pushed closer toward debt restructuring.

GVO's unsecured notes, the 10.5% US$300m 2018s and 11.75% US$300m 2022s, were trading at just 20 cents to the dollar after the company appointed legal and financial advisors and said it was taking steps to strengthen its capital structure.

The unsecured bonds had already plunged by more than 30 points last week as fears of a restructuring intensified.

GVO's 10.875% US$135m secured notes maturing in 2020, issued just four months ago, were quoted at a bid-offer cash price of 35-45, a trader said - losing half their value in a week.

"The group is engaging in close discussions and negotiations with potential new and current investors, as well as discussing with its creditors alternatives for its capital structure," the company said Sunday.

"With these measures, the group is confident that it will be able to face the difficult period which the sector is going through, thereby continuing its century-old story of success."

The trader said the bondholders and company would likely do all they can to keep the business as a going concern and avoid a long drawn-out bankruptcy.   Continuación...