Brazil

Out in the Atlantic Ocean, 130 miles off the coast of Brazil, an oil ship the length of New York City’s Chrysler building is at the center of an escalating legal war. This battle pits the crude producer founded by Eike Batista, Brazil’s most notorious ex-billionaire, against bondholders who loaned another of his companies $500 million, Bloomberg News reported. That company -- Batista’s shipbuilder, OSX Brasil SA -- lost the rights to the vessel when it defaulted on bonds in March after filing for bankruptcy protection in 2013.

A corruption probe threatening to engulf Brazil’s government intensified as police arrested a former top minister of ex-President Luiz Inácio Lula da Silva for allegedly orchestrating a scheme that looted billions of dollars from oil giant Petróleo Brasileiro SA, The Wall Street Journal reported. Authorities say José Dirceu, who served as Mr.

Brazil has gone from being a motor of the world economy as one of the fast-growing so-called Bric nations to the sick man of the large emerging markets, the Financial Times reported. Unemployment is soaring, business confidence plummeting. Standard & Poor’s, the ratings agency, is considering cutting its investment grade rating to junk. The country is breaking records in all the wrong ways.

Standard & Poor’s warned Brazil on Tuesday that its investment grade rating was at risk as falling growth and political infighting hurt efforts to restore order to public finances. The agency placed Brazil’s foreign currency rating, which is one notch above junk, on negative outlook for possible downgrade, initially weakening Brazil’s currency, the real, up to 2 per cent against the dollar, the Financial Times reported.

A Brazilian court approved a debtor-in-possession loan to engineering firm OAS SA, the company said, after it earlier this year filed for bankruptcy protection in the wake of a corruption investigation that shut its access to refinancing. In a statement published late on Tuesday, OAS said judge Daniel Carnio Costa freed up the so-called DIP loan of 800 million reais ($254 million) after court-appointed administrator Alvarez & Marsal Holdings LLC gave the go-ahead for the financing facility.

Most industrialists acknowledge the need to tackle the budget deficit, which at 7 per cent last year was the worst in a decade, the Financial Times reported. But many industries in Brazil are heavily dependent on government protection, subsidies and tax incentives to survive in an economy that the World Bank regards as one of the world’s least competitive. Critics feel the axe is falling too heavily on the wrong areas, such as exports, investment and manufacturing.

Brazilian federal police carried out search-and-seizure requests Tuesday against several local politicians, including former President Fernando Collor de Mello, as part of an investigation into an alleged corruption scheme at state-run oil firm Petróleo Brasileiro SA, The Wall Street Journal reported. The police seized documents in the home and offices of several congressmen, including Mr. de Mello, according to a police spokesman. The spokesman declined to name the other politicians whose homes and offices were searched. From Mr.

Venezuela must refinance its foreign debt to improve government cash flow in the face of recession and soaring inflation, opposition leader Henrique Capriles said on Tuesday, but added a default would have "terrible consequences" for the country. The OPEC nation is struggling with the shrinking economy and chronic shortages of basic goods following last year's oil market rout, with bond payments taking up a growing portion of available hard currency. "We must sit down immediately and seek better conditions for debt payment," Capriles told a news conference.

Brazilian engineering and construction conglomerate OAS S.A. late on Friday unveiled a restructuring plan to a Sao Paulo court, the latest step in a plan to avert bankruptcy amid a corruption scandal at Petróleo Brasileiro SA, Reuters reported. The plan, which still needs approval by the court, laid out two scenarios for the restructuring of about 8 billion reais ($2.5 billion) in debt, both counting on proceeds from asset sales and a debtor-in-possession (DIP) loan. OAS had until June 22 to present a plan.

In a related story, the International New York Times reported that Brazilian police on Friday arrested one of the country’s richest men, Marcelo Odebrecht, as the fallout broadens in an investigation into corruption at the state-run oil giant Petrobras. The investigation, which is looking into whether subcontractors may have colluded with top Petrobras executives to overbill the company and pay bribes, has touched the highest levels of government and business. In the latest development, Mr.