Brazil

Nextel Brazil has been rebranded as Claro-nxt after being acquired by America Movil in December last year, Developing Telecoms reported. America Movil, which operates Claro Brasil, spent US$905 million to obtain the unit from NII Holdings. Nextel subscribers have now been migrated and can access Claro’s LTE-A network, as well as benefits such as free calling and WhatsApp messages. Nextel’s former parent NII Holdings has now filed a “verified petition for dissolution” in the Court of Chancery of the State of Delaware, reports TeleGeography.

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Coronavirus Tips Brazil Into Recession

Brazil’s economy has officially entered a recession following the swingeing impact of the coronavirus crisis, which has so far killed more than 120,000 Brazilians and pushed millions into unemployment, the Financial Times reported. According to the Brazilian Institute of Geography and Statistics, gross domestic product shrank 9.7 per cent quarter-on-quarter, reflecting the effect of widespread economic shutdowns, which have hammered consumption and investment and triggered a wave of corporate bankruptcies. Compared with the same quarter last year, GDP was 11.4 per cent lower.

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Wirecard inked a deal to sell its operations in Brazil, its insolvency administrator said on Friday, the first asset of global operations to sell after the company collapsed amid an accounting scandal earlier this year, Reuters reported. An agreement in principle has also been reached to sell some operations in Britain, and the process of selling its North American operations are well advanced with a deal expected “shortly”, the administrator said.

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Brazilian telecom firm Oi SA proposed amendments to its restructuring plan on Friday, urging creditors to extend new loans and to get higher bids for assets put on the block. Creditors will vote on the proposed changes on Sept. 8, as Oi plans to exit bankruptcy protection by May 2022, roughly six years after starting the process, Reuters reported. “After lots of talks, we concluded that the plan needed some more flexibility than initially foreseen,” Chief Executive Rodrigo de Abreu said in an interview.

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Brazilian airline Azul SA said on Tuesday it had reached an agreement with its aircraft lessors that would help it save some 3.2 billion reais ($594.61 million) in working capital through 2021 and be repaid beginning in 2023, Reuters reported. The airline has been in negotiations with lessors as the coronavirus crisis derailed Latin America’s air travel industry in March. Azul hired a restructuring firm when the crisis set in and said it was renegotiating its debts out of court to avoid a potential Chapter 11 bankruptcy filing.

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Brazil's top four listed lenders are giving months-long extensions for consumers and companies to repay 235 billion reais ($43.98 billion) in outstanding loans, a move to give financially squeezed borrowers breathing room, the International New York Times reported on a Reuters story. The loans subject to forbearance programs, which range from 13% of Banco Santander Brasil SA's portfolio to 10% of Itau Unibanco Holding SA's, are an indicator of potential defaults.

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A Brazilian high court ruled on Thursday that the 11 billion reais ($2 billion) debt owed by bankrupt telecom Grupo Oi SA to Brazil’s telecommunications regulator Anatel will not get preferential treatment in restructuring negotiations, Reuters reported. The Superior Court of Justice, known as STJ, Brazil’s second-highest court, ruled that the debt was administrative and could not be given priority treatment. Brazil’s biggest fixed-line telecommunications operator filed for bankruptcy protection in June 2016. Oi had about 65 billion reais of debt at the time.

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Itau Unibanco Holding SA’s Chief Executive Candido Bracher said on Tuesday that next year he sees Brazil’s 90-day default ratio reaching higher levels than in previous crisis, Reuters reported. “Brazil’s GDP is poised to drop by unseen levels, so it is natural that there will be higher loan delinquency rates,”, Bracher told journalists in a conference call. Itau’s 90-day delinquency ratio reached a peak of 5.6% in 2009 and 4.8% amid a recession in 2016. Its second-quarter loan default was at 2.7%, but Bracher said he sees it going up next year, as grace periods extended to clients end.

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Brazil’s Gol Linhas Aereas Inteligentes on Friday said its daily cash burn could quadruple in the next three months compared with the second quarter, adding to heavy 2020 losses already totaling 4.3 billion reais ($823.3 million), Reuters reported. Brazil’s largest domestic carrier, like almost all airlines around the world, is reeling from the impact of the coronavirus crisis on travel. It reported a net loss of 2 billion reais in the quarter. Gol’s own forecasts show it could face a liquidity crunch soon. The airline is scheduled to repay $300 million to Delta Air Lines in September.

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LATAM Airlines will fire “at least” 2,700 workers in Brazil, including pilots, its Brazilian arm said on Saturday, as the bankrupt carrier struggles to cut costs and cope with an industry collapse due to the COVID-19 pandemic, Reuters reported. In a statement, LATAM Brasil said it opened a voluntary redundancy process on Friday which will run through Aug. 4, after which a further minimum 2,700 jobs will be cut. The announcement followed the breakdown in talks with the SNA union over workers’ pay, the statement said. O Globo and O Estado de S.

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