Viveo Launches R$ 870M Capital Increase to Tackle Debt

Brazilian healthcare distributor CM Hospitalar S.A., widely known as Viveo (B3: VVEO3), has approved a private capital increase of up to R$ 869.76 million. The strategic move is designed to reduce the company's net debt and restructure its balance sheet following a period of leverage pressure. Under the approved terms, Viveo will issue up to 966.4 million new ordinary shares priced at R$ 0.90 each. This pricing represents a 26.8% discount to the stock's previous closing price of R$ 1.23.

The transaction is structured to allow eligible market participants to subscribe to the capital increase through either cash payments or the conversion of existing debt instruments. To incentivize participation, Viveo is allowing subscribers to purchase the new shares either in cash or through the conversion of outstanding debentures from its fourth, fifth, sixth, and seventh issuances. The controlling shareholder, DNA Capital—the investment vehicle of the Bueno family which holds a 37% stake in Viveo—has anchored the transaction. DNA Capital committed to a minimum subscription of R$ 427 million by converting its debentures at face value. These specific bonds have recently traded at discounts of 55% to 60% in the secondary market.

The capital injection is a complementary step to Viveo's broader debt-profiling efforts. The company recently concluded negotiations with debenture holders to stretch its debt maturity profile to 2034, securing a principal amortization grace period until 2029. Viveo finished the first quarter with a net debt of R$ 2.9 billion and a leverage ratio of 3.88 times EBITDA. Financial modeling shows that the minimum guaranteed conversion by DNA Capital will lower leverage to approximately 3.3 times EBITDA. If the capital increase is fully subscribed through debt conversion, leverage is projected to drop to 2.7 times EBITDA, reducing pressure on the company's cash flow.