By Brazil Stock Guide – Brazil’s state-owned postal service Correios has signed a 12 billion-real ($2.5 billion) syndicated loan with domestic banks, backed by a federal government guarantee, as the company seeks to stabilize its finances after posting record losses.
The financing agreement runs through 2040 and includes a sovereign guarantee from the National Treasury. Under the structure, the federal government would cover debt service should Correios fail to meet its obligations, significantly reducing risk for lenders. Treasury officials said the operation complied with interest-rate limits for loans carrying federal guarantees and met all requirements used to assess the repayment capacity of state-owned companies with approved recovery plans.
The loan comes amid the deepest financial crisis in Correios’ history. In the first half of 2025 alone, the company reported losses of 4.36 billion reais, driven by rising personnel costs, weaker cash flow, and higher court-ordered liabilities. Revenue was also hit by changes to Brazil’s “Remessa Conforme” import program, which reduced income from international parcel deliveries.
Additional pressure stems from the company’s operational footprint, with about 85% of its branches running at a loss. As liquidity tightened, Correios and the federal government began negotiations early this year on measures to restore financial balance.
Management has since approved a broad restructuring plan that includes cost cuts, a voluntary redundancy program, asset sales involving idle real estate, contract renegotiations, and changes to employee health plans. Other steps include reduced working hours, a return to in-person work, and the launch of a proprietary online marketplace aimed at diversifying revenue.
Speculation over a potential privatization has resurfaced amid the crisis, but President Luiz Inácio Lula da Silva has ruled out selling the company. He attributed the financial deterioration to management failures and said the government will make leadership and structural changes to restore Correios’ viability, while keeping it under public control.