South America

Brazilian airlines are seeking government aid to help curb losses stemming from a weakening currency, in the first sign that the rapid sell-off of emerging market assets is beginning to hurt the country’s corporate sector, the Financial Times reported. The plea was swiftly followed by further declines in the real, which closed at R$2.4543 against the US dollar, the lowest level since December 2008, after US Federal Reserve minutes showed officials in support of slowing its monthly asset purchases later this year.

Brazil has called for the IMF-backed rescue programmes for Greece and other southern eurozone countries to be reviewed to make them more economically sustainable. The call from finance minister Guido Mantega came as he sought to explain Brazil’s stance on Greece’s rescue programme after its IMF representative, Paulo Nogueira Batista, abstained from a vote to approve the latest tranche of help for Athens.

Brazil’s representative to the International Monetary Fund’s executive board abstained from approving the fund’s new €1.8bn contribution to Greece this week and issued a stinging criticism, arguing that Athens might be unable to repay its rescue loans, the Financial Times reported.

As Brazilian banks kick off their second-quarter reporting season this week, there are concerns that a hoped-for recovery after a couple of sluggish years will be marred by the possibility of losses related to the troubled industrial group of Brazilian tycoon Eike Batista, the Wall Street Journal reported today. Brazil's largest banks have grown rapidly over the past decade, as lending soared amid economic stability and rising employment and salaries. But profits have slid since 2011 as Brazil's economy has slowed sharply and is struggling to recover.

The International Monetary Fund is preparing to back Argentina in a long-running legal battle with hedge funds that has broad repercussions for how governments around the world deal with their creditors, the Wall Street Journal reported today. IMF Managing Director Christine Lagarde plans to recommend to the fund's executive board next week that the IMF file a brief with the U.S. Supreme Court asking it to take the case for review and overturn a lower court's ruling.

Finance ministers from the Group of 20 leading nations plan to launch a new phase of the international crackdown on corporate tax avoidance this week even as UK business leaders are warning their government to resist “radical new solutions” to profit shifting by multinationals, the Financial Times reported. Britain has taken a lead in pressing for reform of the international tax rules after a wave of public anger over the low tax bills paid by some large multinationals.

Brazilian power company Energisa SA on Thursday agreed to acquire control of Grupo Rede Energia SA, sealing a deal aimed at steering the former rival out of bankruptcy protection. Energisa has offered to pay creditors 1.95 billion reais ($862 million) and pump an additional 1.1 billion reais of fresh investments into the company, Reuters reported. Rede Energia has been struggling since energy regulator Aneel seized eight of its units last August in an effort to prevent it from halting electricity service in six states.

In Seoul's upscale Gangnam neighborhood, made famous by pop star Psy's viral music video, government curbs on real-estate lending froze a market in which home prices had been rising as fast as 25% a year, The Wall Street Journal reported. In Toronto, housing prices reversed their rapid rise and fell for five months after the government changed rules to effectively increase monthly payments on new loans.

Creditors of Brazil's Grupo Rede Energia SA, a power distributor seeking to exit bankruptcy protection, approved on Friday a takeover plan by rival Energisa SA that would reduce losses on their investments in the company, Reuters reported. The plan, under which Energisa would take control of Rede and revamp it, must be submitted for final approval by the bankruptcy court, Thomas Felsberg, Rede's lawyer, said. Creditors voted on Energisa's bid and a bid by CPFL Energia SA and Equatorial Energia SA at an assembly.

Brazilian billionaire Eike Batista's EBX Group, a once high-flying industrial conglomerate, began breaking up on Thursday, the latest victim of a decade-long commodities boom that has come to a screeching halt, Reuters reported. Batista, the founder and vital force behind the oil, energy, port, shipbuilding and mining group who branded all his companies with an "X" for "the multiplication of wealth," stepped down as chairman of MPX Energia SA, the embattled EBX Group's most promising company.