(Bloomberg) -- InterCement Participacoes SA, the cash-strapped Brazilian cement maker, sought bankruptcy protection in São Paulo, capping months of talks with creditors after it skipped debt payments.
The filing in Brazil became “the most appropriate option” to ensure the continuity of InterCement’s restructuring efforts, the firm said in the late Tuesday filing. Its parent company Mover Participacoes and subsidiaries are also part of the request.
InterCement had filed for temporary protection from creditors in July and later tried to implement an out-of-court debt restructuring. It pursued a potential sale to steelmaker Companhia Siderurgica Nacional SA but failed to strike a deal.
“It wasn’t possible to conclude the sale process within the strict time-line established in the out-of-court restructuring process, which was deemed necessary by creditors,” Intercement said.
The bankruptcy protection filing “seeks to create an organized and stable forum for a discussion” about the company’s capital structure, it added.
The cement maker has struggled with high interest rates in Brazil and a heavy debt burden. It listed 29.2 billion reais ($4.8 billion) in debt, 15 billion reais of which are intercompany loans, according to the filing.
CSN shares gained as much as 3.8% in Sao Paulo Wednesday, while its dollar bonds due in 2031 were up almost 2 cents. The steelmaker said in a separate filing that it’s no longer engaged in a possible InterCement acquisition.
“Leverage is a top concern for investors in a scenario of higher interest rates in Brazil,” XP Inc. analyst Lucas Laghi said. “Looks like we’re seeing some de-risking” in CSN shares as InterCement talks ended, he said.
--With assistance from Leda Alvim.
(Updates with assets’ reaction, analyst commentary and CSN statement starting in seventh paragraph.)
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