Casas Bahia seeks court-supervised restructuring amid R$17.3bn debt burden

November 2026 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

November 2026 Issue

Brazilian retailer Casas Bahia has filed for bankruptcy protection in a São Paulo court after experiencing mounting financial difficulties. The company and several subsidiaries have sought court-supervised reorganisation as they attempt to address a worsening liquidity crisis.

The company filed for judicial recovery with the Second Bankruptcy Court of São Paulo, reporting R$17.3bn in liabilities and 19,400 unsecured creditors. The filing also included a request for an injunction preventing creditors from accelerating debt maturities and logistics providers from withholding merchandise needed to maintain operations.

Casas Bahia said in a securities filing that it had been affected by a challenging macroeconomic environment characterised by high interest rates, restricted access to credit, rising financing costs and pressure on consumer spending. The company also stated that unsuccessful fundraising efforts further aggravated the situation.

The bankruptcy filing came less than two years after Casas Bahia completed a major out-of-court restructuring intended to strengthen its balance sheet and improve financial flexibility.

According to court documents, insurers, investment funds and leading electronics manufacturers are among the retailer’s principal creditors. Of the R$17.32bn in claims subject to the proceedings, R$16.41bn, or almost 95 percent, comprise unsecured claims. The largest individual claim belongs to Zurich Minas Brasil Seguros at R$1.98bn. It is followed by credit rights investment fund IBCB-AF01 at R$1.09bn, Samsung at R$937.6m and Intra at R$928.1m.

The creditor list also includes financial institutions. Banco Digio appears with R$655.6m in claims classified as obligations arising from guarantees and co-obligations, while Banco do Brasil holds R$598.1m within the same creditor category.

Before the filing, Casas Bahia had sought to reduce net debt and financial leverage, recording nine consecutive quarters of improvement in its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) margin. In the second quarter of 2026, leverage fell to 0.5 times adjusted EBITDA from 2.2 times a year earlier. Free cash flow reached R$800m during the quarter, compared with R$173m in the second quarter of 2025.

Despite those efforts, the company’s problems had been developing for several years. It has reported quarterly losses since 2024 and posted losses in 20 of the 30 quarters since GPA relinquished control in 2019. During 2026, Casas Bahia sought fresh financing to support operations, but market conditions deteriorated rapidly.

Although leverage remained relatively low following a debt renegotiation completed two years ago, increasing working-capital pressures constrained the business. Difficulties obtaining credit to purchase inventory reduced product availability and weakened sales performance.

Casas Bahia reported a net loss of R$10.1bn in the second quarter of 2026, compared with R$555m a year earlier. Much of the loss resulted from write-downs of goodwill and tax assets, provisions linked to the closure of 298 stores and revised expectations for future performance.

“In recent years, we have done important work transforming the Company,” said Renato Franklin, chief executive of the Casas Bahia Group. “We have significantly reduced our financial debt, improved our capital structure, advanced in efficiency, and strengthened cash generation. But we need to recognize that this evolution, while crucial, was not enough in the face of a more restrictive credit environment, high interest rates, and pressured consumption.

“The reality has changed, and together with our Board of Directors, we have made decisions to adapt the Company to this new reality,” he added.

Following the filing, the company began discussions with suppliers and creditors to secure support for a restructuring plan and maintain access to merchandise and trade credit. Reports also indicate it is exploring debtor-in-possession financing to fund operations during the reorganisation process.

The court must now assess the judicial recovery request. If accepted, Casas Bahia will be required to submit a formal restructuring plan for creditor approval as it seeks to stabilise the business and preserve operations.

Richard Summerfield