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The Wetzel factory, from Joinville, had its request for extrajudicial recovery approval denied for a debt of R$ 64.8 million. Founded in 1932, the Santa Catarina industry sold a unit for R$ 115.245 million and maintains about 690 workers while evaluating a possible legal measure against the sentence.
The traditional Wetzel factory, founded in 1932 and located in Joinville, in the North of Santa Catarina, had its request for approval of an extrajudicial recovery plan, which sought to renegotiate approximately R$ 64.8 million in debts, denied by the court. The decision was communicated to the market by the company at the end of May 2026.
According to the portal ND Mais, the new financial chapter occurs after the company sold, in 2024, its Isolated Productive Unit of Iron Foundry to Schulz for R$ 115.245 million. Even after the operation, used to reorganize previous obligations and strengthen the remaining units, Wetzel reported facing new liquidity pressure while maintaining about 690 workers.
Court denies Wetzel’s extrajudicial recovery plan
The request presented by Wetzel sought judicial approval of an extrajudicial recovery plan, a modality used by companies that negotiate directly with part of their creditors before seeking court validation. In the case of the Joinville company, the plan sought to renegotiate a debt of R$ 64.8 million with part of the creditors.
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The Regional Court of Bankruptcies, Judicial and Extrajudicial Recovery of Jaraguá do Sul denied the request due to “lack of procedural assumptions,” according to the communication made by the company itself to shareholders. The expression indicates that the court understood that the necessary requirements for the progress of that request were not present.
The decision does not mean, in itself, the closure of Wetzel’s operations nor an immediate liquidation of the company. The company informed that it is analyzing the grounds of the ruling and is considering appropriate legal measures, including the possibility of an appeal.
Factory founded in 1932 continues with about 690 workers
Wetzel is one of the traditional industries in Joinville and began its activities in 1932. Throughout its history, the company has operated in segments related to industrial components, parts for the automotive sector, and products aimed at electrical installations.
Currently, even after selling a significant part of its production structure, the factory maintains about 690 workers. This number increases the economic relevance of the court decision, as the discussion involves not only creditors and financial documents but also jobs and industrial activity in one of the main manufacturing cities in Santa Catarina.
The maintenance of the operation becomes especially important because Joinville brings together an extensive industrial chain, formed by suppliers, service providers, specialized workers, and companies dependent on metal-mechanic activity. When a historic industry faces financial difficulties, the repercussions can reach a network larger than the company itself.
Sale for R$ 115 million involved iron foundry unit
In 2024, Wetzel sold to Schulz the UPI Iron Foundry, a unit that included a factory of cast iron parts for automotive vehicle systems, as well as machines, equipment, facilities, land, and an electrical substation.
The operation took place for R$ 115.245 million and was part of the company’s previous judicial recovery process. The auction was approved in December 2024, transferring to Schulz an industrial unit considered compatible with its strategy of expansion in the castings market.
For Wetzel, the sale represented an attempt to reorganize its balance sheet and focus efforts on operations that remained under its control. The negotiation removed a relevant production unit from the company, but also allowed for advance payments and reduced part of the obligations accumulated in the previous process.
Proceeds from the sale had different destinations in the restructuring
The amount received from the sale of UPI Ferro was not allocated to a single purpose. According to information released by the company itself, the funds allowed for the early settlement of remaining installments from the previous judicial recovery, which would still be paid over several years.
The amount was also directed towards the payment of severance pay related to employees linked to the sold unit, covering extrajudicial credits, amortizing bank debt, and forming working capital for necessary investments to ensure the company’s continuity.
This allocation helps explain why selling a unit for over R$ 115 million does not automatically eliminate all financial risks for a company. A factory can sell valuable assets, settle significant obligations, and still remain exposed to operational costs, interest, revenue decline, and new cash needs.
Wetzel had already undergone previous judicial recovery
The current difficulties arise after a recent trajectory marked by financial restructuring. Wetzel entered judicial recovery in 2016, after facing impacts attributed to the economic recession that occurred between 2014 and 2016.
The plan for that recovery was approved in 2017, and the process was closed in September 2022 after fulfilling the planned obligations. Subsequently, the sale of UPI Fundição de Ferro allowed for the early settlement of remaining payments linked to the previous recovery.
Even so, the company states that it faced difficulties again in an economic environment marked by the pandemic, global semiconductor crisis, international conflicts, high interest rates, and a slowdown in the automotive sector. The new attempt at renegotiation shows that overcoming a previous process does not prevent an industry from facing financial pressure again years later.
Plan sought to reorganize debt of R$ 64.8 million
The extrajudicial recovery plan presented in 2026 aimed to renegotiate a debt of R$ 64.8 million with some creditors and reorganize the company’s financial flow.
Unlike traditional judicial recovery, extrajudicial recovery starts with negotiations with specific creditors and seeks subsequent approval of the agreement by the Judiciary. Wetzel previously reported that it had conducted negotiations with financial and operational creditors before taking the plan to court.
The rejection prevents, at this moment, the request from being approved in the form presented. For the Joinville factory, the challenge is to decide whether to appeal the decision or seek other alternatives to renegotiate obligations and preserve its operational capacity.
Loss in 2025 reinforced pressure on remaining units
After the sale of the iron foundry operation, Wetzel continued to operate with remaining units. However, according to documents presented in the process and information disclosed about the case, the company ended 2025 with a net loss of R$ 20.2 million in continuing operations.
The company also recorded a negative financial result of R$ 35.5 million, an indicator that helps to measure the pressure caused by financial expenses, indebtedness, and credit conditions. In an industry dependent on production, raw materials, energy, labor, and customer demand, this scenario can limit investments and increase the urgency for renegotiation.
The situation exposes the contrast between two moments of the company. In 2024, the sale of the unit was presented as a milestone to restructure commitments and strengthen Wetzel’s future. In 2026, the factory is once again seeking alternatives to deal with financial difficulties.
The case shows that a relevant sale operation can relieve liabilities, but not necessarily resolve structural pressures on revenue, costs, and liquidity.
Automotive crisis appears among factors cited by the company
Wetzel linked part of its difficulties to the behavior of the automotive sector, one of the markets served by the company. The slowdown of this chain can affect orders, production volume, and margins of industrial suppliers related to component manufacturing.
In addition to the automotive market, the company mentioned impacts associated with the pandemic, the global semiconductor shortage, the war in Ukraine, and the high interest rate environment. These factors were presented by the company as elements that contributed to deteriorating its financial situation after the previous recovery.
The argument follows a problem faced by different manufacturers: industrial companies can have high fixed costs and depend on consistent order volumes to maintain operational efficiency. When demand falls and financial costs increase, even a traditional factory can struggle to balance production, debt, and cash generation.
Agreements with adhering creditors remain valid, says Wetzel
Despite the judicial rejection of the homologation request, Wetzel reported that the agreements made with creditors who adhered to the plan remain valid. The company also stated that it has restructured its financial debt in bilateral negotiations with creditor banks that were not subject to the presented plan.
According to the management, negotiations with other creditors are ongoing. The company did not detail, in the disclosed communication, which judicial measure will be effectively adopted nor presented a new schedule for any appeal or reformulation of the renegotiation strategy.
This uncertainty keeps attention on the company’s next steps. While the court has not yet approved the presented plan, Wetzel needs to manage its individual negotiations, sustain operations, and preserve the confidence of workers, suppliers, customers, and creditors.
Factory situation has economic weight for Joinville
Joinville has one of the largest industrial concentrations in Santa Catarina, and traditional companies are part of the city’s economic identity. Wetzel, with over nine decades of activity, holds a significant place in this history due to its connection with the metal-mechanic sector and job creation.
The presence of about 690 workers makes the company’s future a matter of concern not only for investors and creditors but also for families, suppliers, and professionals linked to the local industry. Each decision regarding debt, production, or restructuring can influence expectations inside and outside the company’s units.
At the same time, the case highlights the challenge of preserving old industries in markets subject to rapid changes, intense competition, and high financial costs. Keeping a factory open after decades of activity requires more than tradition: it requires cash flow, demand, negotiation, and adaptability.
Wetzel evaluates next steps after new judicial barrier
Wetzel reached 2026 carrying the weight of a new financial renegotiation shortly after selling a significant industrial unit. The transaction of R$ 115.245 million allowed it to settle old obligations and finance stages of restructuring, but did not prevent the company from presenting a new plan to renegotiate a debt of R$ 64.8 million.
Now, after the rejection of the request for approval, the company needs to decide how it will continue handling its liabilities while maintaining its operation and about 690 workers in Joinville. The episode involves debt, jobs, industry, and the future of a brand founded in 1932.
In your opinion, is the sale of units a sufficient path to preserve traditional factories in difficulty, or do companies like Wetzel need broader strategies to maintain jobs and regain stability? Comment.
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