Brazil

The Inhauma shipyard in Brazil is the latest to succumb to a crisis that has wiped out nearly half of the country’s naval industry jobs in the past two years, leaving companies bankrupt and creditors unpaid, Bloomberg News reported today. State-controlled Petroleo Brasileiro SA, which had agreed to pay more to have platforms built at home to help jump-start the naval industry, is now sending work back to Asia, underscoring the vulnerabilities of an industry that basically relies on a single client.

Oi SA is sticking to its year-end goals of tripling subscribers who use multiple services and boosting investments by 25 percent even as the phone carrier works through Brazil’s biggest-ever bankruptcy, Chief Executive Officer Marco Schroeder said, Bloomberg News reported. The company is current in payments to suppliers and aims to continue on that front to guarantee service to customers during the bankruptcy process, Schroeder said in his first-sit down interview since taking the helm of the Rio de Janeiro-based operator a month ago.

Carlyle Group LP, the world's No. 2 private-equity manager, is in talks to sell its stake in Brazilian lingerie maker Scalina SA, following a series of setbacks that led to a debt restructuring, three sources with direct knowledge of the situation said, Reuters reported.

A minority investor in Oi SA, Brazil's largest fixed-line phone carrier, has called for the replacement of most of its board after the company filed for the country's biggest-ever bankruptcy protection, Reuters reported. Nelson Tanure, a Brazilian investor with a contentious track record, and partners have been buying up shares through a fund controlled by Bridge Administradora de Recursos Ltda, according to four sources familiar with the matter.

Brazil's Óleo e Gás Participações SA, which has been under bankruptcy protection for nearly three years, said on Monday it has restarted output from its Tubarão Martelo offshore oil field near Rio de Janeiro after a four-month outage, Reuters reported. The restart came after Óleo e Gás, formerly known as OGX Petróleo e Gás Participações SA, received permission from Brazil's oil regulator ANP. Output had been shut since March 6, when the field produced 6,222 barrels of oil, according to the Óleo e Gás website.

Oi SA, Brazil's largest fixed-line telephone carrier, plans to start meetings with bondholders and banks next week as part of the country's biggest-ever bankruptcy protection process, Chief Executive Marco Schroeder said on Thursday, Reuters reported. To restructure its 64.5 billion reais ($20 billion) of bonds, bank debt and other liabilities, Oi will propose a mix of cuts in the nominal debt value, extension of maturities and conversion of debt to equity, he said in a phone interview. Schroeder did not elaborate on the terms to be proposed.

Brazil’s unemployment rate increased between March and May, while wages continued to decline, as Latin America’s largest economy faces a deep and prolonged recession, the Financial Times reported. Joblessness rose to 11.2% from 10.2% in the previous three-month period and 8.1% compared with a year earlier, the Brazilian Institute of Geography and Statistics, or IBGE, said Wednesday. Average monthly wages fell to 1,982 Brazilian reais ($582), adjusted for inflation, from 2,037 reais in the year-earlier period. The drop in jobs and wages comes as the country’s recession lingers.

Brazil's biggest bankruptcy filing ever is sending shockwaves far beyond the recession-hit country's borders as operator Oi SA seeks creditor protection from global telecoms suppliers and export banks around the world. Oi is seeking protection on over 500 million reais ($150 million) of accounts payable to international providers from Nokia Corp and Ericsson to IBM Corp and Alcatel-Lucent SA, according to court documents reviewed by Reuters.

Brazil’s federal government plans to bail out the state of Rio de Janeiro with 2.9 billion reais ($849 million) as it struggles with a fiscal crisis less than two months before the Olympic Games begin, The Wall Street Journal reported. According to a presidential decree published late Tuesday, the transfer is to be used for public security during the Olympics and Paralympics, set to be held in August and September, respectively.

Brazil’s Oi SA, a telecommunications company that recently filed the largest bankruptcy in the country’s history, is seeking court protection in the U.S. to shield its assets from an affiliate of hedge fund Aurelius Capital Management LP, one of its holdout bondholders, The Wall Street Journal reported. Oi and several affiliates sought chapter 15 protection—the section of the bankruptcy code that deals with international insolvencies—at the U.S. Bankruptcy Court in Manhattan on Tuesday, with a debt load of $19 billion.