Magazine Luiza approves funding of R $ 800 million and can reduce journey

Magazine Luiza, brazil's largest retail group, valued at 62 billion reais on the stock exchange, today announced a plan to overcome the crisis caused by the new coronavirus pandemic that includes the possibility of raising funds in the financial market and the reduction in employee hours and salaries provided for in Provisional Measure 936/2020, published by the federal government on April 1. The decision was taken "mainly due to the unprecedented situation generated by the pandemic of the covid-19 [respiratory infection] – a crisis of features not yet fully known and that does not spare individuals, organizations or savings", according to a statement sent by the company to the financial market on the evening of Tuesday, 7. The first measure was the approval by the Board of Directors of Magalu, the issuance of R$ 800 million in debentures. The statement does not clarify whether there is already a schedule for this operation. It says only that the group ended the year 2019 with 7 billion reais in cash and receivables, but still prefers to prepare to face the expected drop in demand for the products for home that sells and for the subsequent economic recovery. The period of austerity must be "shared by all," the retailer said. In early April, the group's management reduced the salaries of its president, Frederico Trajano, and the vice president of operations, Fabrício Bittar Garcia, by 80% for a three-month period. The remuneration of 12 executive directors and the seven members of the board of directors was cut by 50%, and those of the other directors by 25%. Not to make layoffs because of the crisis of the new coronavirus, a commitment made by Magalu with the signing of the manifesto #nãodemita at the end of last week, the retailer will make use of the MP edited at the beginning of the month, which allows the suspension of labor contracts for up to 60 days, with partial payment of wages via unemployment insurance, and the proportional reduction for three months of up to 70% of working hours and salaries, with complementation of salaries by the federal government. Magalu has not yet decided which tools it will actually use. In March, after the closure of all its physical stores, which total more than 1,000, about 20,000 employees had their vacations early and paid. He started to pay twice the daycare aid to increase the remuneration of logistics and distribution teams. The retailer is monitoring by its data analysis department when to reopen stores in each location, but says it won't do so until there is security. It is part of the package of measures announced today, also, the renegotiation of contracts with suppliers to lower costs and extend deadlines. The retailer postponed its ordinary and extraordinary general meetings of shareholders that would take place in April to the end of July in order to gain time and clarity to define the policy of distributing dividends to investors. The release of the results for the first quarter of 2020 will be postponed from May 7 to the end of next month, because the measures to restrict movement imposed by the pandemic can hinder the delivery of documents. The Brazilian Securities and Exchange Commission (CVM), which oversees the Brazilian financial market, authorized this type of postponement on March 25 because of covid-19.