Brazil farm retailer AgroGalaxy files for bankruptcy, shares tumble
Adds share move in paragraph 4, details of a separate statement from AgroGalaxy in paragraphs 5-6
SAO PAULO, Sept 18 (Reuters) -Brazilian farm retailer AgroGalaxy AGXY3.SA said on Wednesday that it has filed for bankruptcy, sending its shares down more than 13%.
In a securities filing, the firm said its financial situation demanded urgent action to balance its debt and improve its capital structure.
The company, which mostly sells agricultural products such as seeds and fertilizers, recorded 1.5 billion reais ($275 million) in net debt during the second quarter, as well as a 362-million-reais adjusted net loss, 40% larger than a year earlier.
Its shares fell 13.3% on Wednesday to 0.98 real ($0.18).
In a separate statement, AgroGalaxy said that lower commodity prices, adverse weather conditions, high interest rates and rising production costs have led to a material increase in defaults by farmers, which hit its liquidity.
"AgroGalaxy tried to avoid going to court, but the measure is necessary to protect the business and, more importantly, allow the company to continue working side-by-side with farmers," Chief Executive Eron Martins said.
The retailer, which also produces seeds, made its debut on Brazil's stock exchange in 2021.
In the filing, the firm said it has filed for bankruptcy through a confidential court process, and added that shareholders will be requested to ratify the move.
($1 = 5.4655 reais)
Reporting by Andre Romani and Roberto Samora in Sao Paulo; Editing by Sarah Morland, Aida Pelaez-Fernandez and Rod Nickel
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