negotiations with taxpayers involve discounts that can reach 90%
By Joice Bacelo - From Rio
05/27/2021

The conclusion of the so-called “thesis of the century” overheated the market for the purchase of
credits and rights linked to lawsuits. Investment banks and managers
have directed billions of reais to negotiations with companies interested in
receive the amounts that the Union will need to return for having charged PIS and
Cofins with ICMS embedded in the calculation.


This transaction can be win-win for both parties. Companies, upon receiving
this amount immediately, reinforce cash and capitalize in the midst of the crisis. Already
investors, who acquire credits with discounts that can reach 90%,
they will, in the future, profit above the market's safe rates of return.
“Investors are knocking on the door. Demand has increased dramatically since the
decision [of the Federal Supreme Court, on the 13th]. And there is a lot of company with
need to capitalize. Companies, mainly, that are suffering for
cause of the pandemic. The service sector is one of them ”, says lawyer Tiago Conde,
partner of the Sacha Calmon office.

Quadra Capital, which operates in this market, claims to have R $ 1.5 billion to invest.
It is negotiating with companies that have lawsuits in progress. It proposes to
anticipating the value that is under discussion, takes the case against the Federal
(fees and procedural costs) and ahead, with the case closed (carried over
res judicata), raises the total by means of a precatory.

In this modality, there is no risk for the company selling the credit. If the
the investor is unable to raise the total calculated in the negotiations, he is the one
suffers the loss. The seller does not need to return money or pay any
additional amount.

The discounts practiced by Quadra in these operations vary widely - between 40%
and 90%. It depends on the stage of the process, how much time is estimated for the issue
of the precatory, and also of the way the operations are structured. He can
there is an “earn-out” clause, for example, providing for additional payments to the
depending on when the credit is received - and this influences the
percentage to be agreed.

“We have adopted this [earn-out] mechanism to align expectations and interests
the seller and the buyer. If, eventually, the process proceeds faster
than expected, the price paid increases significantly ”, says Gabriel
Lunardi, one of the manager's partners.

Quadra is currently negotiating with a large retail company. THE
company filed a lawsuit to discuss the exclusion of ICMS from the calculation of PIS and
of Cofins in 2014. As, by law, you can charge the return of what you paid for
more in the previous five, there are credits accumulated since 2009.
The Union will, with the end of the process, have to return all the tax collected in a
improper. As, in this case, it is an ordinary action, which generates the refund
through a precatory, there will still be a liquidation phase ahead, when the judge
checks the documentation that supports the receipt and authorizes the shipment
of the title.

“It could take months. We have a case here that is 220 thousand documents
pages. It took us three days to get everything into the court system. The judge must
appoint an expert to analyze all these documents, ”says Lunardi.

There is another model of contract on the market that does not depend on shipping
precatory. The investor anticipates the values ​​to the company, also at a discount, and,
ahead, when you can make the compensation - use the credits to settle
current taxes - the company returns the money. “It’s not really a
loan because the investor takes the risk. If something goes wrong, it turns to dust, the
seller will not return what he has already received ”, says the partner of a bank that offers
this modality.

He states that, with the decision of the STF, putting an end to the discussion, the risks
have decreased for the investor and, consequently, the prices for those who are
selling improved. “But you need to have robust documentation, proving the
values ​​they have to receive. That is our main concern today. ”
This investor also says that he is negotiating with companies that need
cash, are in crisis, but not only. He has talked, for example, with
companies that are interested in improving the results for the quarter and that is why
wish to anticipate the receipt and also with those that have a volume
large amount of credits and will not be able to use it - to pay taxes
current - within the five-year period established by the Federal Revenue Service.
Another bank with whom Valor talked with said that it is under negotiation
including with companies listed on the stock exchange. “These credits became more
interesting after the decision of the STF. Before, we had only done one operation
of that type. The risk was enormous. Now we are looking very closely at
the market."

Jive Investments, which operates in the credit and rights purchase market
linked to lawsuits, also acted in a restrictive manner before the Supreme Court
hit the hammer on that case. Now, says Guilherme Ferreira, one of the partners of
manager, “is very optimistic” and “willing to pay more”. It intends to invest R $ 1.5 billion in credits 
generated by the “thesis of the century” until the end of next year.
“The insecurity that existed in relation to this thesis was eliminated with the decision of the
STF. The risk that exists now is one of time, how much will it take to become res judicata and be 
able to execute or compensate ”, he says. Jive negotiates both by the modality in which the credit
 recovery takes place through a precatory and in the other, also common in the market, in which 
the company returns the values ​​when it can make the compensations.

This market was heated in 2017, when the STF decided that the ICMS did not
could compose the basis for calculating PIS and Cofins - reducing the amounts payable
in contributions to the government and generating an accumulation of credit to companies for
because of overpayments made in the past.

The Pão de Açúcar group was one of the first to choose to sell credits. THE
acquisition was made by BTG Pactual in 2018. The information was disclosed in the
balance sheet for that period. The gain resulting from this sale amounted to approximately R $
50 million

But the market ended up cooling because of the revenue's understanding of the
tax that should be removed from the calculation. Through a query solution,
No. 13, the agency informed that it would only accept the tax actually collected from the
States. The Attorney General's Office of the National Treasury (PGFN) also addressed this
issue when filing the appeal, in the STF, against the decision of March 2017.
This episode created insecurity for investors. The ICMS collected is generally
lower than the one highlighted on the invoice and could interfere a lot in the credit volume of the 
companies. On the 13th, when judging the Union's appeal, the ministers
decided by the one highlighted in the invoice, favoring the taxpayer, and defining,
therefore, the way in which the values ​​that the Union will have to account for are to be accounted for.
give back.