Francisco (Paco) L. Cestero is a lawyer of reference for international restructurings and corporate transactions in Brazil, having advised debtors, creditors, acquirors, and funding providers on the most complex and litigious international restructurings by Brazilian debtors of the last decade.

Paco advises on both the transactional and tactical litigation aspects of restructurings and other corporate transactions. He has uniquely deep expertise in crafting creative and business-oriented solutions on behalf of debtors, creditors, and other interested parties, and is praised for his shrewd tactical and negotiation skills. His interdisciplinary practice, which includes experience with cross-border M&A and finance transactions in both Brazil and the rest of Latin America, allows him to create novel and holistic solutions for clients, effectively guiding them through the multifaceted issues that arise in crisis scenarios across emerging markets.

Paco joined the firm in 1995 and became a partner in 2004. He joined the São Paulo office in August 2011. From 1998 to 2002 and from 2008 to 2011, he was resident in the firm’s Rome office. Before attending law school, Paco worked at the Government Development Bank for Puerto Rico, where he participated in several privatizations.

Notable Experiences

Restructuring and Finance

  • Highlights

    • Advised on the restructuring of over $72 billion of debt by Brazilian debtors.
    • Extensive experience in financings for distressed debtors, including with DIP, exit, loan-to-own and other secured financings and rights offerings.
    • Worked on the most complex of circumstances, including allegations of corruption, environmental disasters, and regulatory crises.
    • Represented both debtors and creditors in out-of-court, pre-packaged transactions (recuperação extrajudicial), and judicial reorganizations (recuperação judicial).
  • Odebrecht S.A. in what is likely to be the largest judicial restructuring proceeding in Brazilian history.

  • Samarco Mineração in its ongoing restructuring efforts in connection with over $10.1 billion of debt and related litigation.

  • Odebrecht Engenharia e Construção in a complex extra-judicial restructuring and related consent solicitation to restructure approximately $3.3 billion aggregate principal amount of notes.

  • An ad hoc group of bondholders in connection with the judicial restructuring of Oi S.A., one of the main integrated telecommunications service providers in Brazil and the largest emerging markets non-sovereign restructuring to date, involving approximately $20 billion of debt, which also involved a recapitalization and subsequent financings pursuant to the restructuring plan.

  • Ad hoc group of secured project finance lenders in connection with the restructuring of over $1.67 billion in total indebtedness of Constellation Oil Services Holding S.A. and its subsidiaries (QGOG Group), and in connection with its ongoing follow-up restructuring.

  • The ad hoc creditors committee of secured bondholders in connection with the restructuring of Odebrecht Oil & Gas, involving over $4.5 billion of debt.

  • The ad hoc group of bondholders and DIP lenders in connection with the restructuring and financing of OGX, involving approximately $5.8 billion of debt, and the restructuring of OSX-3, involving the re-negotiation of the vessel charter amendments between OSX-3 and OGX and approximately $500 million of debt.

  • The unsecured bondholders of Tonon Bioenergia in an $800 million debt restructuring and new secured loan financing.

  • The ad hoc group of bondholders in connection with the $1.2 billion restructuring of GVO.

  • An alternative asset manager in connection with its proposed DIP loan to OAS and possible acquisition of Invepar, in connection with its approximately $4.2 billion restructuring.

  • The majority creditors in connection with certain waivers and amendments to the bonds secured by oil royalties issued by Rio Oil Trust, an oil trust created by Rioprevidência, the State of Rio de Janeiro’s pension fund, in connection with its $3.1 billion restructuring.

  • A lead investor in connection with a convertible secured financing to a newly-created company that will carry out Oi’s infrastructure operations, as contemplated in its restructuring plan.

  • Numerous private equity and financial and strategic investors in distressed investments and debt restructurings in Brazil and Latin America, including Edenor, Cydsa, CTI Holdings, BCP/BSE and Alestra.

  • Doral Financial, a bank based in Puerto Rico, in a recapitalization transaction that entailed an equity investment of $610 million in Doral by a newly formed bank holding company in which a number of private equity and asset managers invested, as well as on various enforcement and reporting matters. 

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Mergers and Acquisitions

  • Highlights

    • Significant expertise on special situation and distressed transactions, involving both debt and equity components.
    • Advised on deals across numerous industries, with significant experience in TMT, natural resources and private equity.
    • Handled and advised on M&A transactions in the most complex of circumstances, including allegations of corruption, environmental disasters and complex antitrust considerations.
    • Represented leading Brazilian companies on outbound expansion and multinationals investing in Brazil.
  • TPG in its announced sale of Evoltz to Ontario Teachers’ Pension Plan Board.

  • Enel in its $1.48 billion acquisition of Eletropaulo.

  • TPG and Gávea Investimentos in their acquisition of a 25% equity interest for approximately $230 million in Rumo Logística.

  • A group seeking to acquire Rede Energia, a distressed Brazilian utility.

  • Compass Minerals in connection with the sale of its Brazilian operations.

  • Tupy in connection with its €210 million acquisition of Fiat Chrysler Automobile’s global cast iron automotive components business.

  • BHP in connection with the carve-out of certain assets as part of the demerger of South32, as well as in various M&A and joint venture activities in Brazil.

  • Baidu, a leading Chinese language internet search provider, in its acquisition of the Brazilian operating subsidiaries of Peixe Urbano.

  • TIVIT (Brazil) in its acquisition of Synapsis.

  • A mining company in South America in structuring and negotiating a long-term private investment contract with a select group of high quality potential investors who will be entitled to receive periodic payments based on the production levels of the company’s iron ore assets.

  • América Móvil (the largest wireless operator in Latin America) in over 10 international restructurings, acquisitions, and joint ventures throughout Brazil and the rest of the Americas, as well as in various capital market and bank financings.

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Crisis Management and Investigations

  • BHP Billiton, Vale, and Samarco to conduct the external investigation into the cause of the breach of the Fundão tailings dam.

  • A large multinational home appliance corporation in an internal inquiry regarding a Brazilian tax matter.

  • A major financial institution in ongoing investigations concerning FX markets in Mexico, Brazil, and Argentina.

  • A media company in an internal investigation concerning alleged data manipulation at its Brazilian operations.

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