Peru’s closely watched presidential election race between two polarized candidates is the latest in a string of political risk events haunting investors in Latin America, a region struggling to keep up with its global peers despite a commodities boom, Reuters reported. Latin America was engulfed in social unrest before the COVID-19 pandemic hit. Now a string of elections that continues into 2022, protests in Colombia and upheaval over Chile's constitution have investors bracing for a new wave of uncertainty over policy making.
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Brazilian airline Azul SA has approached Chile’s bankrupt LATAM Airlines Group with the aim of buying its Brazilian operation, Reuters reported. Azul’s shares rose more than 9% in Sao Paulo on the news, while LATAM’s shares in Santiago, where the airline is listed, were down 20%. LATAM filed for bankruptcy protection a year ago and, while it has secured new liquidity in that process, it has yet to present a formal restructuring plan.
Covid-19 bankrupts a travel-industry power player. Investors dump its securities. But wait: vaccines roll out, economies reopen, and that once-doomed firm looks pretty attractive to traders once again. The tale of Latam Airlines Group SA’s Chapter 11 case is looking eerily similar to that of Hertz Global Holdings Inc. in some respects, Bloomberg News reported. Both went bankrupt as the virus raged. Both were in decent financial shape before the pandemic ground travel to a halt.
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Colombia’s dollar bonds dropped and the peso led losses among emerging-market currencies after S&P Global Ratings cut the country’s credit rating to junk amid a political crisis and mass unrest, Bloomberg News reported. The nation’s dollar-denominated bonds due 2031 dropped 0.4% to 96.7 cents in early New York trading Thursday, sending their spread over U.S. Treasuries up to 1.84 percentage points. The peso weakened 2% to 3,760 per dollar.
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As LATAM Airlines Group reshuffles its operations and cleans up its financial situation as a part of its chapter 11 bankruptcy process, the group’s branches continue their streamlining and cost-cutting measures. The latest agreement — and one of the most relevant with respect to labour relations so far — was announced this week at LATAM Brasil. In an internal announcement, the company announced it would be outsourcing its ground agent jobs at almost all Brazilian airports.
Brazilian bus company Itapemirim is launching a new airline in June, betting it can dodge the financial ruin that has grounded many rival carriers even though the land transport company just spent five years reorganizing under bankruptcy protection, Reuters reported. The carrier expects to have a fleet of 50 Airbus A320 planes by next year, all painted in Itapemirim’s signature bright yellow color, trying to beat the odds that have led 11 airlines to fail in Brazil so far this century.
The group of rich government creditors known as the Paris Club is willing to delay a $2.4 billion debt payment from Argentina due this month if the nation meets certain conditions, potentially averting a damaging default, Bloomberg News reported. The club will spare Argentina from default if it misses the May 31 payment in the hope that the country can rework a $45 billion credit with the International Monetary Fund, said one of the people, who asked not to be named because the talks are private.
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The once-mighty but now cash-strapped Argentine soy crusher Vicentin said on Thursday that it is starting talks to sell a majority stake to export firms Viterra, Molinos Agro and Argentine cooperative ACA, Reuters reported. Argentina is the world’s No. 1 supplier of soymeal feed, used to fatten hogs and poultry from Europe to Southeast Asia. And family-owned Vicentin was the country’s top exporter of soy byproducts before falling into bankruptcy in 2019.
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Chileans flocked for a third time to withdraw money from their retirement funds this week, draining nearly $10 billion from the country's privatized pension system in a move some billed as a lifeline amid a fierce second wave of the coronavirus pandemic, Reuters reported. Chile's Congress in late April approved a bill allowing citizens a third opportunity to withdraw 10% of savings held in privately held pension funds. Many Chileans have already twice tapped their funds since the pandemic struck in March last year, hobbling a system once hailed by free-market economists worldwide.
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