Responding to rumors that it would close its operations in Brazil, Nubank informed customers that it “remains strong” in the country. “Don’t believe in fake news“, says the text published on the bank’s website. The rumor began to gain strength on the social network after Nu Holding, owner of Nubank, warned the market that it is migrating its BDRs (receipts for shares traded abroad) from level 3 to level 1 of the Brazilian stock exchange. With the change, the company will cancel its registration as a publicly-held company in Brazil.
“Nubank will not close in Brazil. We just announced, in September 2022, a change in our BDRs program, which concerns who is an investor in Nubank or NuSócio, but does not affect customers who use Nubank’s products and services. company.
Just over nine months after the much-celebrated and publicized IPO (IPO) with double listing on the New York Stock Exchange, Nubank announced that it will no longer directly list its assets in Brazil.
The rationale for this is to “maximize efficiency and minimize redundancies” of being a publicly traded company in more than one jurisdiction. Fintech said that, with this measure, it will reduce unnecessary duplicate workloads in regulatory requirements.
A company that has a Level 3 BDR has to present the financial statement in accordance with the Brazilian standard, for example, which is not necessary in the case of those that have a Level 1 BDR. In this case, the information that needs to be disclosed must follow the standard jurisdiction in which the original action is listed.
Despite the migration from Level 3 to Level 1, Nubank has committed to continue with the translation of all documents required by the SEC (Securities and Exchange Commission, equivalent to the American CVM) into Portuguese, in order to “support the symmetry between the publicly available information for both markets”. The files will be available on the bank’s investor relations website.
Holders of Nubank BDRs will have three options: exchange the receipts for shares traded in the US; swap the level 3 BDR for a new one, level 1; or sell the BDRs on a Brazilian or American stock exchange, in a “facilitated sale process” to be instituted by the company.
In addition to the doubts of investors in these assets about the next steps, there were many questions about what will be the impact of this move for the company and also for those who continue with its shares.
Analysts consulted by InfoMoney at the time, they assessed that the announced move to delist the assets is bad in terms of reputation, in addition to being potentially negative for minority shareholders.