Brazil

Businesses' requests for bankruptcy protection in Brazil doubled in the first four months of 2016 as the harshest recession in decades and borrowing costs at nine-year highs crimped the ability of factories and retailers to stay afloat, the local unit of credit research company Experian Plc said on Wednesday. Companies filed an all-time high of 571 requests for court protection from creditors, compared with 289 filings a year earlier. Last year, a record 1,287 companies sought bankruptcy protection, according to Serasa Experian, which has collected data on the indicator since 2006.

More Brazilian companies will face increasing liquidity risk through next year as rising borrowing costs and the harshest recession in decades hamper their ability to service debt, Moody's Investors Service said on Monday, Reuters reported. A Moody's team of analysts led by Erick Rodrigues said in a report that the number of companies facing high funding risks rose to 33 percent last year, from 28 percent in 2014. More debt is maturing than companies can generate cash to make payments, while banks are refinancing fewer loans, the analysts said.

Brazilian construction company Grupo OAS said its creditors would take over its 24.5 percent stake in infrastructure company Invepar as part of a restructuring plan, Reuters reported. OAS's shares of Invepar will be transferred to SPE Credores by the end of the day on May 31, the company said in a statement on Thursday. Grupo OAS filed for bankruptcy protection in a São Paulo court last year to restructure 8 billion reais ($2.3 billion) in debt owed by nine units.

Brazil's rig leaser Sete Brasil Participações SA has decided to file for bankruptcy protection, the company said on Wednesday, Reuters reported. According to a source with direct knowledge of the matter, state-controlled pension fund Petros reversed its earlier position against the bankruptcy filing at a shareholder's meeting on Wednesday. The decision allows Sete Brasil to garner the 85 percent threshold for approval to file for creditor protection, said the source, who requested anonymity because the matter is private.

Rio de Janeiro said it’s running out of money to pay for basic services months before the Olympic Games while other Brazilian states warned of similar financial crises if the federal government doesn’t provide debt relief, Bloomberg News reported. Six state governors and a representative for Rio de Janeiro said on Tuesday their fiscal woes are forcing them to make cutbacks that could lead to a breakdown of social services. Rio has been delaying payment of salaries to public servants since the beginning of the year.

A political crisis and a two-year corruption scandal have brought Latin America’s largest economy to its knees. Now the country is looking to the lower house to end the political stalemate. There legislators prepare to vote on Sunday whether to move ahead with an impeachment of President Dilma Rousseff that could end with Vice President Michel Temer taking the reins, Bloomberg News reported. The government is appealing in the Supreme Court to halt the vote.

For the past two months, Brazilian financial markets have staged wild rallies over any sign that left-leaning President Dilma Rousseff might be ousted from office, even as the nation’s economy spiraled further into the depths of its worst crisis in generations, The Wall Street Journal reported. Now, with a crucial impeachment vote looming on Sunday, investors may soon get their wish for new leadership. If two-thirds of lawmakers in Brazil’s lower house vote to try Ms. Rousseff on charges of doctoring the government’s fiscal numbers, she will have to step aside, at least temporarily.

Bankruptcy protection requests in Brazil more than doubled in the first quarter from the year-earlier period, as businesses suffered from the highest borrowing costs in a decade and a steep recession dragged down revenue, credit research company Serasa Experian said on Wednesday. Companies filed 409 requests for court protection from creditors last quarter, the highest number since the country enacted a bankruptcy law in 2005, Serasa said in a report. In the first quarter of last year, 191 companies sought bankruptcy protection, Serasa said.

State-controlled Petróleo Brasileiro SA unsuccesfully sought the appointment of arbiters to rework a long-term contract with debt-laden drilling rig leaser Sete Brasil Participações SA, according to three sources with knowledge of the situation, Reuters reported. The proposal, made in recent weeks, called on each party to name three mediators to rework the contract, said the sources, who requested anonymity since the plan is private. The contract between Petrobras and Sete Brasil has been in dispute for two years.

Brazilian airline Gol Linhas Aereas Inteligentes SA said Monday it has hired U.S.-based PJT Partners Inc. as a financial adviser, as the country’s deep economic recession is hurting demand for air travel, The Wall Street Journal reported. Gol said in a statement it hired “PJT Partners to advise the company in connection with measures to strengthen its capital structure and liquidity and to improve the profile of its debt.” In February, Moody’s Investors Service downgraded its rating on Gol because the airline faces a cash crunch in coming months as debt payments come due.