Brazil

Brazil's central bank appointed a committee on Thursday to investigate the reasons behind last year's collapse of Banco BVA SA for an additional 120 days, giving potential buyers more time to consider acquiring the mid-sized lender, Reuters reported. The central bank seized the Rio de Janeiro-based bank on Oct. 19, citing deteriorating financing conditions and a breach of regulations. At the time, regulators gave the bank's administrators 90 days to find a buyer or face liquidation.

Opposition from foreign bondholders is unlikely to stop the takeover of Brazilian power holding company Grupo Rede Energia SA by two rivals, several sources with direct knowledge of the situation told Reuters. The process should be concluded ahead of a court-mandated deadline in July, and the buyout plan by Equatorial Energia SA and CPFL Energia SA may help limit losses for bondholders, the sources said. But bondholders are fighting a proposal that would restructure Grupo Rede's debt and cut the value of their holdings by 85 percent.

Brazil’s consumer-loan default rate fell in November for the first time in five months as the government pushes banks to reduce interest rates, Bloomberg reported. The consumer default rate fell to 7.8 percent from 7.9 percent in October, the central bank said in a report distributed today in Brasilia. Interest rates to consumers fell to a record 34.8 percent.

The majority of creditors of Independencia, an insolvent Brazilian meatpacker, approved a restructuring plan of the company's debt today, removing one of the last remaining obstacles for the firm to be taken over by its larger rival JBS, Reuters reported today. JBS started out as a family butcher in Brazil and became the world's largest beef producer by assuming control of smaller firms, a strategy it has recently resumed. Read more.

Centrais Eletricas do Para SA, a Brazilian utility know as Celpa that was acquired this month by Equatorial Energia SA, filed for Chapter 15 bankruptcy protection in New York, Bloomberg reported. The company, based in Belem, Brazil, listed both debt and assets of more than $1 billion in documents filed today in U.S. Bankruptcy Court in Manhattan. Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while a company reorganizes abroad. Celpa is asking the U.S.

Brazilian state-led power company Eletrobras said on Tuesday that it plans to take over Cia de Eletricidade do Amapa (CEA) to help restructure the bankrupt northern Brazilian utility and recover debts, Reuters reported. The companies and the government of Amapa, which controls CEA, agreed to sign shareholder and management agreements aimed at restoring CEA to financial health, Rio de Janeiro-based Eletrobras said in a statement on Tuesday. Amapa authorities will receive financing from Brazil's federal government to pay off CEA's debts to Eletrobras and other suppliers.

Police in Sao Paulo said on Monday they had arrested the former head of bankrupt Brazilian lender Banco Cruzeiro do Sul on charges of money laundering and crimes against the country's financial system and capital markets, Reuters reported. Last month Brazil's central bank ordered the liquidation of the bank and its subsidiary, Banco Prosper, after seizing the lender on June 4 due to fraud-related losses and after administrators failed to find firm takeover bids. The liquidation of the bank represents one of the biggest collapses in the country's banking system in years.

Brazil's central bank seized Banco BVA SA on Friday, the latest sign of strain facing the nation's small-sized lenders following years of fast credit-fueled growth, Reuters reported. Deteriorating financing conditions and a breach of regulations at the Rio de Janeiro-based lender were cited as the main reasons behind the decision, the central bank said in a statement. Banco BVA had in recent weeks been at the center of speculation over a potential collapse.

A decision by Brazil's central bank to reduce reserve requirements for commercial banks was not motivated by the liquidation of troubled consumer lenders Banco Cruzeiro do Sul and Banco Prosper, a senior government official said on Thursday, Reuters reported. The bank lowered some requirements on deposits on Sept. 14, the same day it folded the banks for accounting fraud and losses. "The reserve requirements decision has nothing to do with the troubles facing some small banks.

Brazil's central bank ordered the liquidation of Banco Cruzeiro do Sul on Friday after no one stepped up to acquire the troubled lender, raising doubts about government oversight of small- and mid-sized banks, Reuters reported. The central bank also ordered the closure of Banco Prosper, another small bank facing a liquidity crunch that Cruzeiro do Sul had agreed to take over last November. The decision follows three months of talks between Cruzeiro do Sul's creditors, investors and rival banks to cut mounting debts and find a buyer for the São Paulo-based lender.