Petrobras shares plunged 21% on Monday, wiping out 70 billion reais ($12.7 billion) in market value, as Brazilian President Jair Bolsonaro again slammed its pricing policies after he replaced the state-controlled oil company’s market-friendly CEO with a retired army general, Reuters reported. The selloff, following a series of analyst downgrades, deepened after Bolsonaro said the company’s fuel policy was only pleasing to financial markets and select groups in Brazil and should be changed as part of an effort to lower gasoline and diesel prices.
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Brazil on Thursday ditched a trade complaint against Canada over aircraft subsidies and called for wider negotiations between all aircraft producing nations to halt a slide toward aircraft trade wars, sidestepping the World Trade Organization, Reuters reported. The abrupt move by Brazil, home to the world’s third largest planemaker Embraer, comes as larger rivals Airbus and Boeing remain locked in a 16-year-old fight at the WTO that led to tit-for-tat transatlantic tariffs.
Brazil looks set to break a key fiscal rule to provide another round of financial aid to the poor as lawmakers pile pressure on President Jair Bolsonaro to act fast during a second wave of Covid-19, Bloomberg News reported. Economy Minister Paulo Guedes has tried to protect the so-called spending cap rule by proposing an emergency constitutional amendment that would allow the government to reduce mandatory spending in other areas -- a process that would require lengthy negotiations with congress.
Brazilian miner Vale agreed Thursday to pay $7 billion in compensation to the state of Minas Gerais where the collapse of its dam two years ago killed 270 people, polluted rivers and obliterated the surrounding landscape, the Wall Street Journal reported. The settlement, the biggest in Brazilian legal history, is a watershed moment for a country long hampered by impunity and where miners and big businesses have often exerted more power than the state, especially in rural areas.
A Brazilian appeals court on Wednesday could clear up a legal hurdle delaying Bunge’s plans to take over two soy processing plants following a deal in May with crusher Imcopa, Reuters reported. Wednesday’s hearing will focus on two Panama-registered firms that claim, as indirect creditors of Imcopa, which is in bankruptcy protection, to have rights to some of the proceeds from the sale, according to court filings seen by Reuters. The three-judge panel is expected to rule on whether the Panamanian firms Minefer Development SA and Triana Business SA are legitimate participants in the process.
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Brazilian appliance retailer Casa & Video filed for an initial public offering on Friday, according to a preliminary prospectus on the securities industry watchdog CVM website, Reuters reported. The Rio de Janeiro-based company has hired the investment banking units of Itau Unibanco Holding SA, Banco Santander Brasil SA, Citigroup, BTG Pactual SA and XP Investments to manage the offering, confirming a previous Reuters report. The company did not disclose in the filing a pricing range for its shares nor the pricing date.
Brazilian right-wing President Jair Bolsonaro on Wednesday wrote to newly inaugurated U.S. President Joe Biden that he hoped the two countries would pursue a broad free trade agreement during Biden’s tenure, Reuters reported. The letter is Bolsonaro’s most amicable overture yet to Biden, a Democrat. The Brazilian president was a close ally of former Republican President Donald Trump and refused for weeks to accept the result of the Nov. 3 U.S. election, repeating baseless allegations of fraud. It took him 42 days to recognize Biden’s victory.
The Canada Pension Plan Investment Board is joining a fund managed by Banco BTG Pactual SA to make a binding offer for the fiber unit of Brazilian telecom carrier Oi SA, Bloomberg News reported. The bid is expected Jan. 22, along with two other binding offers. Highline do Brasil, part of Digital Colony, and Ufinet, which is backed by Italy’s Enel SpA, both plan to make bids for the business. Oi is planning to sell as much as 51% of its subsidiary, known as InfraCo, with a value for the whole company of at least 20 billion reais ($3.6 billion).
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The Brazilian state of Minas Gerais is hoping to win at least 28 billion reais ($5.3 billion) from a compensation deal with miner Vale SA after the 2019 Brumadinho deadly dam burst, a senior state official said on Wednesday, Reuters reported. State and Vale officials will meet on Thursday, when it is expected talks on compensation will begin, ahead of a court-mediated hearing expected in January, said state secretary general Mateus Simões. “The idea is that we end the text discussion tomorrow and start the value discussion,” he told Reuters.
Latin America’s luck will change. Pandemic lockdowns caused more regional corporations to default between early May and June. But yield-starved investors will ignore some of these risks, Reuters reported. There’s a lot of bad news to ignore. The International Monetary Fund expects Latin American and Caribbean economies to contract by more than 8% in 2020, the most of any region, with only a 3.6% improvement in 2021. And non-financial companies with foreign debt have seen revenue dented by a combined $200 billion due to the pandemic, Fitch Ratings estimates.