Oct 7, 2015
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Havaianas parent company in turmoil

Oct 7, 2015

In July, the giant Petrobras corruption scandal, known as 'Lava Jato' (operation Car Wash), which is jolting Brazil, turned towards the Camargo Correa conglomerate. One of Brazil's main industrial and building groups, Camargo Correa, is among the 23 large companies involved in the scandal.

Havaianas' largest European store is located in Barcelona - Foto: Havaianas

Brazilian authorities have signed financial agreements with the large groups involved. In August, Camargo Correa signed a compensation agreement to indemnify local companies for the damage suffered. The amount of this financial compensation is Real 700 million (€155 million). Other similar agreements are reportedly being negotiated.

The Brazilian industrial giant is thus faced with a need for fresh cash to settle these amounts, and will be forced to sell off some of its assets. Alpargatas (Havaianas, Osklen, Rainha…) may well be part of the package.

According to Brazilian media, Camargo Correa, owners of more than 44% of the company stock, stated that "as a result of the interest expressed by potential investors, the group reviewed the strategic opportunities linked with its investment in the company (Alpargatas), and this may also imply a change in the company's ownership."
Still according to Brazilian media, the KKR and Carlyle investment funds are among the potential purchasers. The company's market valuation is reported to be close to Real 3 billion (€785 million).
The Alpargatas group generated Real 1.946 billion (€557 million) in revenues in the first six calendar months of the year, a 5.8% rise compared to the previous year (on a proforma basis). Its EBITDA grew 19.4% to Real 263.7 million (€75 million). In the last quarter, Alpargatas generated 22% of its sales outside of Brazil and Argentina.

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