South America

A spate of farmer defaults in Brazil’s top grain-producing state is creating headaches for global traders who are among their main creditors and posing challenges to the widespread use of barter in the world’s largest soybean exporter, Reuters reported. The battles in Mato Grosso bankruptcy courts pit farmers against international trading houses, such as France’s Louis Dreyfus Corp (LDC) and U.S.-based Bunge Ltd, which have been lending aggressively to producers through Brazil’s unique barter system to protect profit margins from newer traders in China.

Venezuela’s opposition has hired veteran debt lawyer Lee Buchheit to help restructure the country’s more than $150 billion debt burden, suggesting it could take a tough approach to dealing with investors holding defaulted bonds, Reuters reported. Buchheit, a former Cleary Gottlieb attorney who has represented several governments in debt talks with bond investors, published an academic article last year suggesting ways for a future Venezuela government to minimize debt repayments.

Brazilian telecommunications firm Oi SA reported a first-quarter net profit of 679 million reais ($170 million), in a quarter its revenue continued to fall, Reuters reported. This compares to a profit of 30.5 billion reais in the first quarter of 2018 after Oi reached an agreement with creditors in an in-court debt reorganization of the company. A debt for equity swap and a new capital injection were approved last year. The capital raise was completed in January.

When the IMF completed its third review of Argentina’s economy in early April, managing director Christine Lagarde boasted that the government policies linked to the country’s record $56bn bailout from the fund were “bearing fruit,” the Financial Times reported.

Brazilian airline Azul SA on Monday made a new attempt to purchase some of bankrupt airline Avianca Brasil’s most coveted routes, offering $145 million and reversing a decision not to participate, Reuters reported. Avianca Brasil filed for bankruptcy protection in December, setting off a fierce battle for its airport slots, the rights to land and depart in crowded airports, which were expected to be sold at a bankruptcy auction that was suspended indefinitely.

Brazilian airline Azul SA has registered to participate in a bankruptcy auction for the assets of struggling carrier Avianca Brasil scheduled for next week, potentially walking back a previous decision not to participate, Reuters reported. The airline confirmed through a representative that they had registered, although he said no decision had been made whether to actually place a bid. The bankruptcy auction is set for Tuesday.

Hobbled by recession and one of the world’s highest inflation rates, Argentina may be lurching toward the next in a series of economic crises afflicting the country over the last 70 years, Reuters reported. Consumer prices streaked more than 54 percent higher in the 12 months through March in defiance of central bank efforts to control inflation, fueling poverty and further damaging a business climate blighted by nose-bleed high borrowing rates. The peso, which lost 50.5 percent of its value against the U.S.

When investors dumped Argentine bonds en masse just as copies of Cristina Fernández de Kirchner’s autobiography Sincerely began to fly off the shelves last week, it gave new meaning to the term “bestseller,” the Financial Times reported. The asset sell-off took place as all emerging markets were suffering from the strengthening US dollar.

SoftBank Group Corp. is in talks to invest about $230 million in Brazilian online lender Creditas as the firm expands investments in Latin America, according to people familiar with the matter, Bloomberg News reported. SoftBank is planning to do the deal via a joint investment from its Vision Fund and newly created Innovation Fund, according to the people, who asked not to be identified as the details aren’t public. No final decisions have been made, and SoftBank may still decide against the transaction, they said. SoftBank and Creditas declined to comment.

Brazilian retailer Magazine Luiza SA said in a filing on Monday it agreed to buy online shoe retailer Netshoes Ltd for approximately $62 million, Reuters reported. Magazine Luiza offered to pay $2 a share. Rival Brazilian retailer B2W had said earlier in April it was considering the acquisition of Netshoes. Netshoes stocks ended 3.9 percent down on Monday at $2.65. Shares have fallen by 85.3 percent since its initial public offering two years ago, as the company has struggled to turn a profit.