Brazil-based metropolitan rail firm Supervia has filed for bankruptcy protection due to the severe drop in traffic during the Covid-19 pandemic.
The company has requested the Court of Justice of Rio de Janeiro to initiate fresh negotiation with creditors and the granting authority, namely the Rio de Janeiro state government.
Supervia’s total debt amount stands at nearly $237.4m (R$1.2bn).
The company stated that a major portion of the debt was accumulated during the pandemic when it was incurring losses.
Supervia was managing nearly 600,000 commuters a day before the pandemic but the daily flow has now declined to 300,000.
Due to this sharp decrease in passenger footfall, the company has incurred a financial loss of around $94.11m (R$474m) since March 2020.
In a statement, Supervia said: “With the worsening of the pandemic and the economic and social crisis in Rio de Janeiro, the full recovery of the flow of passengers is only expected for 2023.”
The company, along with the entire passenger system in Rio de Janeiro, does not currently have any government subsidy and is operating by using funds collected from the sale of the tickets.
For overcoming the ongoing financial crisis, Supervia stated that it will seek to revise the terms of the contract with the government.
Supervia is controlled by a Japanese group that comprises a subsidiary of Mitsui and West Japan Railway.
Supervia runs the urban train service in the Metropolitan Region, covering Rio de Janeiro, Duque de Caxias, Queimados, São João de Meriti, Belford Roxo, Nova Iguaçu, Nilópolis, Mesquita, Japeri, Magé, Paracambi and Guapimirim.
This 270km railway network is separated into five lines, three extensions and 104 stations.