South America

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.

On a cruise round the Mediterranean, Domingo Cavallo, Argentina’s economy minister in the run-up to the country’s dramatic economic collapse in 2001, was bemused when he was unable to use his credit card during a brief stop-off on Greek soil last week, the Financial Times reported.

Businesses avoid paying $200 billion annually in taxes by channeling their overseas’ investments through offshore financial hubs, a United Nations agency said Wednesday, The Wall Street Journal reported. The estimate by the United Nations Conference on Trade and Development is one of the first attempts by an international governmental organization to put a figure on tax avoidance by companies that record their profits in countries with low tax rates, regardless of where those profits are actually earned.

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.

Brazilian power producer Eneva SA, which filed for bankruptcy protection in December, said on Tuesday it failed to meet a debt payment on June 15 after one of its creditors refused to postpone the maturity date, Reuters reported. The company, which is controlled by Germany's E.ON and fallen Brazilian tycoon Eike Batista, said in a statement the payments were linked to the Parnaiba II power project in the northeastern state of Maranhão, adding that negotiations with creditors were continuing. Eneva did not give a figure for the debt payment.

Dilma Rousseff stepped up her campaign to rescue Brazil’s flagging economy, announcing an infrastructure package worth almost R$200bn ($65bn) on Tuesday, the Financial Times reported. Brazil’s president outlined plans to sell to the private sector new concessions to build and operate nearly 7,000km of roads, as well as four large airports and a number of ports and railways. Ms Rousseff said the aim of the package was to “invest to revive economic growth”.