South America

Cash-strapped Venezuela settled a $1.2 billion arbitration claim that will prevent a creditor from stripping away its crown jewel foreign asset, the U.S.-based Citgo Petroleum Corp refining business, according to Canadian court documents, Reuters reported. The deal with Crystallex International Corp suspends the Canadian mining company’s push for a court-ordered auction of control of Citgo as a way of collecting on an arbitration award against Venezuela that has grown to more than $1.4 billion with interest. Citgo is based in Houston, Texas.

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Brazilian conglomerate Odebrecht SA has hired investment bank Moelis & Co. and law firm Cleary Gottlieb Steen & Hamilton to discuss restructuring of its debt with investors, the company said in a statement on Monday, Reuters reported. Odebrecht’s engineering unit OEC and its advisers will discuss with investors restructuring of $3 billion bonds issued by Odebrecht Finance Limited. The conglomerate decided not to pay $11.5 million in interest on the 2025 bonds after the end of the 30-day grace period, the statement added.

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The cash-strapped construction unit of Odebrecht, the Brazilian group at the centre of a corruption scandal that has rocked Latin America, said Monday it will miss a debt payment, triggering a restructuring of billions in bonds, the Financial Times reported. The company said it would not pay an $11.5m coupon on its 2025 bond due on Monday “to preserve liquidity”.

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Preliminary figures compiled by Venezuela’s central bank indicate that the crisis-wracked nation’s economy contracted 16.6 percent in 2017, according to two people with direct knowledge of the estimates, Bloomberg News reported. For the first time since 2016, the bank is preparing a raft of macroeconomic indicators for the International Monetary Fund to avoid sanctions including a possible expulsion from the lender. Bank technicians began working extended shifts and weekends earlier this month to deliver new growth and inflation data and meet a strict Nov.

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Offshore oil rig operator Vantage Drilling International agreed to disgorge $5 million in a settlement with U.S. regulators related to a corruption probe in Brazil involving Petrobras, The Wall Street Journal reported. Vantage Drilling, based in the Cayman Islands, settled with the U.S. Securities and Exchange Commission over accounting-control deficiencies at its predecessor company that violated the Foreign Corrupt Practices Act.

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Two sugar mills in Brazil owned by India’s Shree Renuka Sugars Ltd, which filed for bankruptcy protection three years ago, will be put up for sale in a judicial auction on Dec. 18, according to court documents seen by Reuters on Wednesday, Reuters reported. U.S.-based fund Castlelake is among the interested parties in the auction, two sources following Renuka’s court case told Reuters. Brazil’s Grupo Teston, which makes equipment for the sugar industry, is also a potential bidder, the sources said. Castlelake and Teston had no immediate comment.

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After four years, dozens of arrests and a handful of restructurings, holders of bonds from Brazil’s construction giants are still suffering the fallout from a corruption scandal that all but halted the industry in Latin America, Bloomberg News reported. The building unit of Odebrecht, which was forced into talks with banks earlier this year amid dwindling cash flow and a dearth of new projects, is again seeking help to deal with debt it can’t afford to pay back, according to a person familiar with the matter who asked not to be identified because the information is private.

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Brazilian food processor BRF SA posted a wider-than-expected quarterly loss on Thursday as trade embargoes, a drop in sales volumes and higher feed prices weighed on management’s efforts to turn the company around, Reuters reported. In its second quarter after a corporate restructuring following a string of bad financial and operating results, BRF said it lost 812 million reais ($218 million). That was almost double the average loss of 443 million reais forecast by analysts, according to IBES data from Refinitiv.

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Brazilian companies are again looking to raise capital by selling shares or refinancing debt as the pre-election uncertainty that put such dealmaking into a deep freeze gives way to optimism after the selection of market-friendly candidate Jair Bolsonaro as president, five people familiar with the matter told Reuters. One of the sources, who asked for anonymity to disclose details of private negotiations, said that up to 10 companies are in talks with investment bankers to sell shares and five other companies are planning bond transactions by January, Reuters reported.

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