UPDATE 1-Shares in Brazil’s Via Varejo plunge as expensive labor liabilities mount

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(Adds details on litigation value, executive remarks)

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SAO PAULO, Nov 11 (Businesshala) – Shares of Brazilian electronics and appliance retailer Via Verejo fell on Thursday, after reporting a loss of 638 million reais ($117.47 million) in the third quarter on costly labor liabilities. fell more than 11% in ,

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The company said the average value of litigation increased by 32% between 2020 and 2021 compared to the 2019-2020 period, and the number of new lawsuits against the company increased by 82% in the first half of 2021 compared to the first semester of the previous year. Year.

As a result, the company set aside 2.5 billion reais at the end of September, up from a provision of 1.2 billion reais in June.

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Via said these labor liabilities are related to layoffs it has conducted since 2011 to boost profitability and said it has hired a consulting firm to help manage legal claims.

In a conference call with analysts, company executives said there was no need for new stock offerings or other measures to pay labor claims, citing a strategy to offset the impact of higher provisions with monetization of tax credits. Was.

$1 = 5.4310 Reporting by Paula Lyer; Editing by Stephen Eisenhammer and Nick Ziminsky

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