Ambipar Emergency Response - Case Summary

Business Description

The Debtor, Ambipar Emergency Response, is a Cayman Islands-domiciled holding company and a subsidiary of Ambipar Participações e Empreendimentos S.A. (“Ambipar Topco”), a Brazilian public company listed on the B3 stock exchange. The Debtor itself is a public company, with its Class A common shares and warrants listed on the NYSE American stock exchange under the ticker symbols “AMBI” and “AMBIWS,” respectively.

• While the Debtor is a U.S.-listed entity with U.S.-law governed debt, it is a non-operating holding company with no material assets other than its equity interests in its direct subsidiary, Emergência Participações S.A., and certain net intercompany receivables.

Founded in 1995, the broader Ambipar enterprise operates through two primary business segments:

• Response: The Debtor serves as the parent holding company for the Response business, which specializes in environmental services across six main units: emergency, fire, marine, medical, industrial, and environmental response.
• ESG: This segment, which is not part of the Debtor’s corporate structure, handles, recycles, and processes residues and recyclable materials primarily throughout Latin America.

Equity and Voting Structure

• The Debtor’s equity consists of Class A Ordinary Shares (one vote per share) and Class B Ordinary Shares (ten votes per share).
• Ambipar Topco directly holds approximately 70.8% of the Debtor’s total equity and all outstanding Class B shares, representing approximately 96% of the total voting power.
• The remaining equity is held by Opportunity Agro Fundo de Investimento (24%), HPX Capital Partners LLC (3.5%), and other public shareholders (1.7%).
• As of the Petition Date, 16,180,000 public warrants and 676,707 private placement warrants remained outstanding.

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Corporate History

Ambipar was founded in 1995 and has grown into a multinational leader in recycling, waste management, and emergency response services with operations in Brazil and around the world.

• The Debtor became a publicly traded entity on March 3, 2023, following the completion of a de-SPAC transaction.
• As part of the transaction, warrants were issued to purchase shares of the Debtor's common stock at an exercise price of $11.50 per share.

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Operations Overview

The Debtor is a holding company that conducts no operations and has no employees. Its primary function is to hold equity interests in the subsidiaries that constitute the global Response business. The Debtor believes its "center of main interests" is in Brazil.

• The Response business operates through a network of direct and indirect subsidiaries in over 40 countries across six continents, with principal operations in the United States, Brazil, Canada, the United Kingdom, Ireland, and Spain.
• The U.S. headquarters for the Response business is located in Houston, Texas, where its operating subsidiaries employ more than 230 people.

Operational Independence of Subsidiaries

• The Response segment’s operating subsidiaries outside of Brazil are not obligors on Ambipar’s funded debt and do not rely on the Debtor, its Brazilian affiliates, or any of the parties in the Brazilian restructuring proceedings for funding or corporate services.
• These operating entities are not debtors in the Chapter 11 case and are expected to continue operating in the ordinary course.

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Prepetition Obligations

The Debtor’s primary prepetition liabilities stem from its limited guarantees on two series of New York-law governed Green Notes issued by a financing affiliate, Ambipar Lux S.à.r.l. (“Ambipar Luxco”). Aside from these guarantees and intercompany loans, the Debtor has no other outstanding indebtedness.

Green Notes Guarantees

• Ambipar Luxco has approximately $1.05 billion in aggregate principal outstanding across two series of unsecured Green Notes, which are also guaranteed by Ambipar Topco and other Brazilian entities.
  • 2031 Green Notes: Approximately $553 million in principal outstanding, bearing interest at 9.875% per annum. The Debtor’s guarantee is capped at $200 million.
  • 2033 Green Notes: Approximately $493 million in principal outstanding, bearing interest at 10.875% per annum. The Debtor’s guarantee is capped at $128.2 million.
• The Debtor’s total exposure under the guarantees is limited to a maximum of approximately $328.2 million.

Other Affiliate Indebtedness

• Holdings USA Loan: An indirect U.S. subsidiary of the Debtor, Ambipar Holding USA, Inc., is the obligor on a $90 million unsecured loan from Itau BBA International Plc. This loan is guaranteed by the Debtor’s direct subsidiary, Emergência Participações S.A.
  • Itau has purported to accelerate the loan, which the subsidiary has disputed. The Debtor is prepared to cause this subsidiary to commence its own Chapter 11 case if a consensual resolution is not reached.
• Brazil Bank Debt: Certain Brazilian affiliates are obligated on over $117 million of Brazilian-law debt. The Debtor and its operating subsidiaries are not obligors on this debt.
• Debentures: Certain Brazilian affiliates have issued five series of debentures with approximately R$2.87 billion outstanding.
  • The Debtor and its operating subsidiaries are not obligors, although Emergência Participações S.A. is the issuer of two series with approximately R$450 million outstanding as of June 30, 2025.

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Events Leading to Bankruptcy

The Debtor’s Chapter 11 filing is a direct result of the financial distress of its parent, Ambipar Topco, and certain Brazilian affiliates, despite the continued operational strength of the Response business. The crisis was triggered in September 2025 by a series of events that undermined market confidence.

Market Confidence Crisis and Defaults

• The abrupt resignation of Ambipar’s chief financial officer in September 2025 triggered a loss of market confidence.
• Subsequently, Deutsche Bank, a counterparty to certain currency swap contracts, demanded significant additional collateral contributions. While Ambipar disputed the calculations, it provided approximately R$170 million ($31.4 million) before Deutsche Bank demanded an additional R$60 million.
• In parallel, other financial institutions, including Banco Santander, notified Ambipar of alleged defaults under their respective financing agreements, creating the risk of cross-defaults across the majority of Ambipar’s funded debt.

Dual Brazilian and U.S. Filings

• In response to the asserted defaults, on Sept. 24, 2025, Ambipar sought and obtained a 30-day preliminary injunction from the Brazilian Court in Rio de Janeiro to stay creditor enforcement actions and facilitate restructuring negotiations.
• When it became clear that negotiations would extend beyond the 30-day period, Ambipar Topco, Ambipar Luxco, the Debtor, and the majority of its Brazilian subsidiaries (collectively, the “RJ Parties”) commenced a formal recuperação judicial (RJ Proceeding) in Brazil on Oct. 20, 2025.
• Concurrently, the Debtor filed a parallel, plenary Chapter 11 case in the U.S. to protect its assets, ensure fair treatment for all stakeholders—particularly holders of its U.S.-law governed debt—and provide an accessible forum for global parties.

Stakeholder and Governance Response

• Following the initial injunction, holders of the Green Notes formed an ad hoc group represented by Davis Polk & Wardwell LLP and Houlihan Lokey.
• On Oct. 10, 2025, the Debtor’s main minority shareholders, Opportunity and HPX, sent a letter to Ambipar Topco’s board alleging undue influence over the Debtor and corporate governance failures.
• To address potential conflicts of interest, Ambipar Topco intends to appoint an additional independent director with restructuring expertise to the Debtor’s board. This director will be granted authority to oversee an independent investigation into potential claims the Debtor may have against its parent and other related parties.
  • FTI Consulting, Inc., previously retained by Ambipar for a forensic accounting review, is expected to be made available to the independent director for this investigation.