South America

Avianca, one of Latin America’s largest airlines, is emerging from bankruptcy protection after winning court approval for its reorganization plan a year and a half after the Covid-19 pandemic decimated the region’s air carriers, Bloomberg News reported. Avianca, which is headquartered in Bogota, said it is exiting the restructuring process after raising fresh investments of $1.7 billion. It also comes out of bankruptcy with “significantly” reduced debt and more than $1 billion of liquidity, the company said in a regulatory filing.
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Brazil’s economy fell into recession as extreme weather conditions, high interest rates and inflation cut short its recovery from the pandemic, dealing a blow to President Jair Bolsonaro just as he prepares for his re-election campaign, Bloomberg News reported. Gross domestic product fell 0.1% in the July-September period after posting a revised decline of 0.4% in the second quarter. From a year ago, the economy expanded 4%, the national statistics agency said on Thursday. The downturn shows mounting challenges for Latin America’s largest economy.
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Brazilian airline Azul SA confirmed on Monday that it made an offer earlier this month to combine with Chile’s LATAM Airlines Group , which is in bankruptcy proceedings, but said it had since decided to focus on its own operations, Retuers reported. In an exchange filing published late on Sunday, Azul said that it would consider potential partnerships only in the future. The Brazilian airline said its non-binding proposal submitted on Nov. 11 had included around $5 billion in equity financing and was backed by some creditors of LATAM.
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Chile's LATAM Airlines Group SA said on Friday that it has filed a reorganization plan, proposing an $8.19 billion infusion of capital into the group, in a bid to exit its chapter 11 protection, Reuters reported. The financing proposal will include a mix of new equity, convertible notes and debt, the group said in a statement, adding that it intends to launch an $800 million equity rights offering to shareholders, upon confirmation of the plan.
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Argentina’s economy expanded more than expected in September as tourism, manufacturing and construction picked up, offsetting political volatility that followed the government’s defeat in primary elections, Bloomberg News reported. Economic activity rose 1.2% from the previous month, double the median estimate of economists in a Bloomberg survey. From a year ago, growth slowed to 11.6%, according to government data published Tuesday. The government’s loss in the Sept.
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Argentina's government plans to agree on its new multiyear economic plan with International Monetary Fund staff before sending the proposal to Congress, Economy Minister Martin Guzman said on local radio on Friday, Reuters reported. "First, we will seek to reach an agreement with IMF staff, and then it will be sent to Congress for ratification," the minister said in comments to local station Radio Con Vos. Earlier in the day, a government source, who asked not to be named, outlined the same plans in an interview with Reuters. The IMF did not respond to a request for comment.
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Shares in Brazilian state-run power company Eletrobras plunged on Wednesday after it reported third-quarter net income of 965 million reais ($175.4 million), down 66% year-on-year, hit mainly by provisions relating to ongoing litigation, Reuters reported. The lawsuits relate to a compulsory energy loan program, which required industrial energy customers to provide money to pay for Brazil's electricity sector. The government promised to repay the companies but this has been repeatedly postponed.
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Peru is joining the global push to develop a central bank digital currency (CBDC), central bank President Julio Velarde said on Tuesday, as policymakers worldwide seek to keep pace with fast-spreading cryptocurrencies, Reuters reported. Speaking at a conference with business leaders in Lima, Velarde said that Peru's central bank is working with the central banks of India, Singapore and Hong Kong in developing a CBDC. "We are not going to be the first, because we don't have the resources to be first and face those risks," Velarde said, "But we don't want to fall behind.
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Surging construction costs are sending delinquency rates skyrocketing among Brazilian developers, persuading a growing number of lenders to dump their loans and creating a feast for distressed-asset funds, Bloomberg News reported. “I’m dealing with explosive demand from banks trying desperately to sell loans they made to construction firms,” said Eduardo Martins, a partner at MGC Holding, one of Latin America’s biggest distressed-asset managers.
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The Peruvian economy grew 9.71% year-on-year in September, slightly above a recent central bank projection, but its slowest pace of expansion since March as it recovers from the COVID-19 pandemic, the government reported on Monday, Reuters reported. Three days earlier, the central bank estimated that the economy had grown between 8.5% and 9.5% in September. In September last year, the economy of the world's second-largest copper producer fell 6.10% year-on-year, when Peru closed large swathes of its economy due to the pandemic.
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