Brazil

Companies in Brazil, struggling with weak economic growth, rising borrowing costs and a currency slump, are likely to boost demand for advice on debt restructuring as early as next year, a partner at investment banking firm Virtus BR Partners said on Tuesday, Reuters reported. The newfound caution of private-sector lenders could make it harder for some companies to refinance existing loans or make new ones, said Eleazar de Carvalho, a senior partner at Virtus. He did not signal out specific sectors, but said refinancing talks between banks and borrowers are starting.

The flagship oil company controlled by Brazilian businessman Eike Batista plans to present a proposal to restructure its debts in two weeks' time, in which bonds would be swapped for shares and the firm would try to raise fresh capital, according to a person familiar with the transaction, The Wall Street Journal reported. The fortunes of OGX Petróleo e Gás Participações SA, the linchpin in Mr. Batista's sprawling industrial empire, collapsed after its only operating oil field failed to live up to expectations when it began production in mid-2012.

Brazilian airlines are seeking government aid to help curb losses stemming from a weakening currency, in the first sign that the rapid sell-off of emerging market assets is beginning to hurt the country’s corporate sector, the Financial Times reported. The plea was swiftly followed by further declines in the real, which closed at R$2.4543 against the US dollar, the lowest level since December 2008, after US Federal Reserve minutes showed officials in support of slowing its monthly asset purchases later this year.

Brazil has called for the IMF-backed rescue programmes for Greece and other southern eurozone countries to be reviewed to make them more economically sustainable. The call from finance minister Guido Mantega came as he sought to explain Brazil’s stance on Greece’s rescue programme after its IMF representative, Paulo Nogueira Batista, abstained from a vote to approve the latest tranche of help for Athens.

Brazil’s representative to the International Monetary Fund’s executive board abstained from approving the fund’s new €1.8bn contribution to Greece this week and issued a stinging criticism, arguing that Athens might be unable to repay its rescue loans, the Financial Times reported.

As Brazilian banks kick off their second-quarter reporting season this week, there are concerns that a hoped-for recovery after a couple of sluggish years will be marred by the possibility of losses related to the troubled industrial group of Brazilian tycoon Eike Batista, the Wall Street Journal reported today. Brazil's largest banks have grown rapidly over the past decade, as lending soared amid economic stability and rising employment and salaries. But profits have slid since 2011 as Brazil's economy has slowed sharply and is struggling to recover.

Brazilian power company Energisa SA on Thursday agreed to acquire control of Grupo Rede Energia SA, sealing a deal aimed at steering the former rival out of bankruptcy protection. Energisa has offered to pay creditors 1.95 billion reais ($862 million) and pump an additional 1.1 billion reais of fresh investments into the company, Reuters reported. Rede Energia has been struggling since energy regulator Aneel seized eight of its units last August in an effort to prevent it from halting electricity service in six states.

Creditors of Brazil's Grupo Rede Energia SA, a power distributor seeking to exit bankruptcy protection, approved on Friday a takeover plan by rival Energisa SA that would reduce losses on their investments in the company, Reuters reported. The plan, under which Energisa would take control of Rede and revamp it, must be submitted for final approval by the bankruptcy court, Thomas Felsberg, Rede's lawyer, said. Creditors voted on Energisa's bid and a bid by CPFL Energia SA and Equatorial Energia SA at an assembly.

Brazilian billionaire Eike Batista's EBX Group, a once high-flying industrial conglomerate, began breaking up on Thursday, the latest victim of a decade-long commodities boom that has come to a screeching halt, Reuters reported. Batista, the founder and vital force behind the oil, energy, port, shipbuilding and mining group who branded all his companies with an "X" for "the multiplication of wealth," stepped down as chairman of MPX Energia SA, the embattled EBX Group's most promising company.

OSX Brasil SA, the shipbuilding company of billionaire Eike Batista, on Monday denied a report it failed to make payments on debt held by Spanish infrastructure group Acciona, Reuters reported. The local Folha da S.Paulo newspaper reported on Sunday that Batista's OSX Brasil was struggling to avoid bankruptcy after it defaulted on some 500 million reais ($222 million) in debt held by Acciona. "The story on the supposed debt with supplier Acciona that OSX CN failed to honor is false," OSX said in a market filing with regulator CVM on Monday. Representatives of Acciona in Spain had no comment.