Petrópolis tries to survive without the owner

With the post of vacant president since its founder, Walter Faria, was arrested four months ago charged with corruption for money laundering and tax evasion, the Petrópolis Group, owner of itaipava beer, has sought loans from foreign banks and funds investment in companies struggling to finance their expansion. Faria turned himself in on August 5 to the Curitiba Court, after five days at large – weigh on him and the company charges of money laundering. The company would have allocated, between 2006 and 2014, R$ 329 million to Odebrecht to pass on the amounts ahead in the form of bribes. The businessman, appointed as one of the 20 richest Brazilians earlier this year by Forbes magazine, also blocked his assets, valued at R$ 1.3 billion. Third largest brewery in the country, with net revenues of R$ 9.6 billion in 2018 and 14% market share – against 61% of Ambev and 20% of Heineken, according to Nielsen data obtained by the State – Petrópolis has been considered a problematic asset for years, although the business is a cash generator. On the one hand, the company attracts interest from competitors and foreign groups because of its growth. On the other hand, investors worry about the group's intricate legal problems. Faria's arrest made the company become considered a "toxic" asset by any interested in buying the brewery, such as rivals Heineken and Femsa, coca-cola bottler. Foreign funds would also be interested in the brewery (read more below). "After all the consolidation of the sector, it is rare to find a relevant beer asset available in a market like Brazil. That's petrópolis's point of attraction," says a businessman in the beverage industry. Sought, Petrópolis states that the sale of control of the business or the search for a partner are totally discarded. And he says business and marketing projects follow at their normal pace. The group is expected to open its seventh plant next year, which is being built in Uberaba (MG). It has plans to build two other new units – one in the South and one in the North of the country. Since 2018, however, the company has been seeking resources to finance its growth. He turned to the American manager Farallon for a loan of R$ 1.2 billion. The fund usually goes to the rescue of assets in a situation of stress. Next to Abu Dhabi's giant Mubadala, he bought a highway concession that belonged to Odebrecht. Petrópolis also negotiated a credit line with German bank LBBW. Wanted, Farallon and LBBW did not return to interview requests. Asked about its financing strategy, the brewery did not comment. Leadership Although Walter Faria has been in prison for 120 days, the Petrópolis Group's speech is that the company is relatively armored from the crisis. The founder's daughter, Giulia, is interim at the head of the company, supported by five company executives. The goal of the defense of the entrepreneur is to reverse the pretrial detention before the December judicial recess, the state found with sources aware of the matter. Faria's legal team includes lawyers Paulo Campoi and Cleber Lopes, a partner at Lopes & Versiani. Former Minister of the Supreme Court Paulo Gallotti recently joined the team. Wanted, the lawyers did not return to interview requests. To remember: justifications for prison In the decision that led to the arrest of Walter Faria, justice lists different crimes. A nephew of the businessman cited a scheme to hide part of the beer production and generate cash obtained on the sidelines of the Tax Office. That money, the lawsuit says, would be passed on to Odebrecht, which returned dollar values, deposited in overseas accounts. The businessman would also make electoral donations via brewery to names defined by Odebrecht. For the "service", Faria would receive advantages of the contractor, which granted discounts on works carried out for Petrópolis.