South America

The chairman of General Motors Argentina, Edgar Lourencon, confirmed that the automaker would not lay off personnel in the country, a day after its mother company in the United States filed for bankruptcy protection, the Buenos Aires Herald reported. Dismissing any rumours about the future of the company, the head of the local branch of GM meanwhile announced that the company is currently developing a new model to be produced in a plant in Santa Fe, which will be exported to the rest of the countries of the Mercosur.

The Philippine Deposit Insurance Corp. (PDIC) recently took over the operations of a rural bank in Cagayan Valley following an order of the Bangko Sentral ng Pilipinas’ Monetary Board for its closure due to P77 million in deposit liabilities, the Business Mirror reported. Ordered closed and placed under receivership was the Banco Agricola Inc., a rural bank in Santiago City and with branches in the towns of Ilagan, Roxas, Cabatuan, Echague, Aurora, Cordon, Alicia and San Mateo, all in Isabela; Maddela in Quirino; and Bambang in Nueva Vizcaya.

BTA Bank, Kazakhstan’s largest lender, began talks with creditors to renegotiate payments on as much as $15 billion of debt in a bid to avert bankruptcy, Chief Executive Officer Anvar Saidenov said. “The viability of the institution will depend on how successful we are in negotiating with our creditors,” Saidenov, who is also chairman of BTA’s management board, said today in an interview in London.

Fiat SpA's chief executive might swear that he is not trying to build an empire, but he is certainly looking for scale--on the cheap. Sergio Marchionne faces a Thursday deadline to close a landmark deal to form a partnership with ailing U.S. car maker Chrysler LLC but he has already shown an interest in Opel, the German unit of General Motors Corp (GM). News reports also speak about a possible collaboration between Fiat and GM in Latin America, especially Brazil where they both have a strong presence.

Ecuador has offered to buy back up to $3.2 billion in defaulted bonds at a large discount in a move that reinforces President Rafael Correa popular tough stance on debt ahead of a presidential election on Sunday, Reuters reported. Finance Minister Elsa Viteri said on Monday Ecuador was offering 30 cents per dollar in a process that would involve a "modified Dutch auction." She did not spell out the terms of the modified Dutch auction. In a standard Dutch auction, the lot for sale is offered at an initial price, which if there are no takers, is then reduced until there is a bid.

Ecuadorean President Rafael Correa may unveil an offer today to holders of $3.2 billion in defaulted bonds, a restructuring he says could include a discount of about 70 cents on the dollar. Falling income from oil has made it unlikely the proposal will include the outright buyback offer that Correa previously mentioned as a possibility, said Ramiro Crespo, head of Analytica Securities in Quito. Instead, he may offer to swap the defaulted debt for new bonds that carry a lower interest rate and longer maturity, he added.

Ecuador says it will formally default on a second set of bonds later this week, the International Herald Tribune reported. Finance Minister Maria Elsa Viteri says the government will default Sunday on $2.7 billion in bonds due in 2030 because it refuses to pay $135 million in interest by the end of a monthlong grace period. Viteri said in a communique Thursday that Ecuador plans to make an official proposal to debt holders this month for an "integral solution" to the defaulted bonds, which account for 32 percent of its foreign debt.

Brazilian bankruptcy filings are set to soar as the country’s corporates are squeezed by a global downturn and gridlocked capital and bank markets, say lawyers specializing in the matter. Ronald Herscovici, a partner at Souza Cescon in Sao Paulo, said the new bankruptcy law in Brazil makes it more attractive for companies to file because it encourages the preservation of the concern, rather than pushing towards asset liquidation, as with the former law, LatinFinance reported.

President Hugo Chavez ordered the expropriation of a rice-processing plant in Venezuela owned by American food giant Cargill Inc. on Wednesday because the company allegedly was not distributing rice at prices imposed by the government, the Associated Press reported. The socialist leader also threatened to nationalize Venezuela's largest food producer, Empresas Polar, amid rising tension between his government and privately owned food producers that authorities accuse of sidestepping price controls aimed at stemming high inflation.

Venezuela took control of a local bank owned by Allen Stanford, who faces U.S. fraud charges, the finance minister said on Thursday, as the impact of the American case spread through Latin America, Reuters reported. Finance Minister Ali Rodriguez said the government would seek to quickly sell the bank. In recent days, depositors had worried that the trouble at Stanford International Bank would hurt Stanford Bank Venezuela and had withdrawn cash from the small local bank even though the companies' assets are separate, industry officials and bank customers said.