Shares in Brazilian waste management company Ambipar plummeted on Thursday after a Rio de Janeiro court issued a preliminary injunction, temporarily preventing the accelerated maturity of its debt. This action follows ongoing concerns regarding the company’s management changes and leverage, according to UBS analysts. Ambipar specialises in environmental management, offering services such as waste management, emergency response, and environmental consulting. The company aims to promote sustainability and environmental responsibility across various industries.
Ambipar’s shares experienced a significant drop, falling 43% by 1652 GMT, after hitting a low point more than a year prior, declining as much as 60.5%, and erasing 7 billion reais ($1.31 billion) from its market capitalisation.
The court’s ruling stems from a dispute with Deutsche Bank, which had sought additional guarantees for loans provided to Ambipar. The court decision indicated that Deutsche Bank’s request for extra guarantees on Ambipar’s green bonds presented an “imminent and concrete” risk to the company. The injunction, as stated by Ambipar in its petition, is crucial as some financial institutions had already started notifying the group about accelerated debt obligations.
Ambipar contended that without the injunction, it would face a “financial hole of more than 10 billion reais.” The injunction will ensure business activities can continue and protect the company’s assets. It also allows Ambipar to seek a viable solution with creditors to resolve its financial obligations. Deutsche Bank has not yet issued a response to requests for comment.
