Key investor wants Brazil's GPA to elect new board of directors

By Luciana Magalhaes

SAO PAULO, March 30 (Reuters) - Saint German, an investment fund controlled by Brazilian investor Nelson Tanure, requested on Sunday that retail chain Grupo Pao de Açucar PCAR3.SA, in which the fund owns around 9% of shares, convene an extraordinary general meeting to remove the current board of directors and elect new members appointed by Tanure.

The plan involves establishing a nine-member board with a unified two-year mandate, including three representatives appointed by Tanure, according to an official filing.

Last year, Tanure acquired enough GPA shares on the market to become its second biggest individual shareholder. He was also considering purchasing additional securities from French group Casino, GPA's biggest shareholder with a 22.5% stake.

An initial expression of interest by Tanure's representatives was then conveyed to Casino, which in the past controlled GPA. But so far no agreement has been announced.

In a statement to Reuters, Tanure, who is known for investing in companies facing restructuring processes, said he wants to reduce GPA's indebtedness through several strategies, including selling non-core assets, evaluating and prioritizing investments, and optimizing its cash flow. GPA's net debt stood at 1.3 billion reais ($230 million) in the final quarter of 2024.

"Focusing on a solid balance sheet will allow the company to have more flexibility in its operations and greater growth capacity," he said in the statement.

Tanure is also proposing the group works to identify potential fiscal, legal and labor risks at GPA. "The idea is not only mitigating risks, but creating an environment of transparency and trust with shareholders and the market," he said.

Tanure plans to nominate Pedro de Moraes Borba, Rodrigo Tostes Solon de Pontes, and Sebastian Dario Los to the retailer's new board. Both Borba and Pontes are high-ranked executives at companies in which Tanure has a stake, while Dario Los has extensive experience working in the retail sector.

According to GPA's website, the retail chain operates about 700 stores, primarily in the state of Sao Paulo, in addition to e-commerce services.