Viveo Approves R$ 870 Million Capital Increase to Delever

CM Hospitalar S.A. (B3: VVEO3), widely known as Viveo, has approved a massive capital increase of up to R$ 869.8 million to aggressively deleverage its balance sheet. The Brazilian healthcare distributor's board of directors greenlit the issuance of up to 966.4 million new common shares. The subscription price has been set at R$ 0.90 per share, which represents a steep 26.8% discount to the previous closing price of R$ 1.23.

The transaction is heavily anchored by DNA Capital, the investment vehicle of the billionaire Bueno family, which currently holds a 37% stake in the company. DNA Capital has committed to a minimum subscription of R$ 427 million by converting its existing debentures at face value. This anchor commitment satisfies the transaction's minimum required threshold of 474.4 million shares. Other debenture holders are also incentivized to participate, as they can convert their debt at face value despite these debentures trading at a 55% to 60% discount in the secondary market.

For investors, this aggressive recapitalization offers a clear path out of the debt overhang that has severely weighed on Viveo's valuation. Viveo ended the first quarter of the year with a net debt of R$ 2.9 billion and a leverage ratio of 3.88 times EBITDA. The minimum debt conversion by the Bueno family alone will bring leverage down to approximately 3.3 times. If the capital increase is fully subscribed through debt conversion, leverage is projected to drop to 2.7 times EBITDA, significantly reducing the R$ 173 million quarterly financial expenses that have dragged the company into net losses.

This balance sheet restructuring complements a broader operational turnaround led by CEO André Clark, who is shifting Viveo from a traditional distributor model toward a critical healthcare logistics infrastructure platform. In the first quarter, Viveo reported a 30.4% year-over-year increase in adjusted EBITDA to R$ 208 million, marking its sixth consecutive quarter of margin expansion. Meanwhile, on the broader Brazilian market, the Ibovespa index (IBOV) rose 0.76% to 173,295.14 points, while major equities traded mixed, with Petrobras (PETR4) down 1.01% at 38.06, Vale (VALE3) down 0.65% at 78.15, and Itaú Unibanco (ITUB4) gaining 1.29% to trade at 42.24.