Aug. 8 (Bloomberg) -- A Brazilian unit of Argentina’s Pescarmona group asked a court to quash a bankruptcy declaration after reaching an agreement with its creditors.
Wind Power Energia SA, a sister company of Industrias Metalurgicas Pescarmona SA, or Impsa, agreed to terms with creditor Libra Terminal Valongo SA, meaning WPE isn’t in arrears, Mendoza, Argentina-based Impsa said in an e-mailed statement yesterday. Bonds snapped a five-day losing streak.
“A swift resolution is expected,” Impsa said. “We will continue to inform on the case.”
WPE was declared in bankruptcy by Judge Rafael Jose de Menezes in a court in the northeastern Brazilian state of Pernambuco on July 30 in response to claims of 10.6 million reais ($4.6 million), according to the ruling on the court’s website. The group’s dollar-denominated bonds plunged by a record after the decision.
The $390 million of 10.375 percent notes due 2020 fell to 30 cents on the dollar yesterday from 47 cents on July 30. The bid price rose to 31 cents at 9:54 a.m. in New York time today. The debt is guaranteed by WPE and Impsa, both of which are owned by Pescarmona through Venti SA.
The decision on whether to repeal the ruling will be made by Judge Helia Silva, who will also consider other claims against WPE, Menezes said yesterday by phone from Recife, Pernambuco. Silva is in Brasilia and unavailable to take calls.
A decision wouldn’t be made before Aug. 11, Menezes said. The July 30 ruling gave WPE 15 days to appeal.
Pescarmona spokesman Ismael Jadur declined to comment when asked about any other creditor claims facing the group in Brazil.
Impsa, which owned WPE prior to a group restructuring last year, was late paying peso bonds last month and was downgraded by Fitch to CCC from B+.
The 2020 bonds were issued by WPE International Cooperatief UA, a company based in Holland. The group’s debt has cross-default clauses and cross guarantees from Venti.
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