South America

Brazilian telecommunications firm Oi SA reported a big quarterly loss on Wednesday, sending shares of the heavily indebted company down nearly 5 percent in morning trading, Reuters reported. Oi, Brazil’s largest fixed-line operator, reported a net loss of 3.359 billion reais ($858 million) in the fourth quarter of 2018 late on Tuesday, 65.7 percent more than the loss it reported a year earlier. Total revenue fell 7.9 percent.

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Brazilian carrier Avianca Brasil will reduce its fleet size and cease operations at Rio de Janeiro’s international airport as it downsizes in the wake of a bankruptcy filing in December, the firm said on Tuesday. The company said in a statement it would seek to reduce the number of destinations it serves to 23 and cut its fleet size to 26 planes over the month of April, Reuters reported. It will also cease operations in the cities of Belem and Petrolina, as well as at Rio de Janeiro-Galeao International Airport.

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Privately owned Brazilian agribusiness group Itaquere has filed for bankruptcy protection to restructure 482 million reais ($127 million) of debt, according to a letter from management seen by Reuters, Reuters reported. In the letter dated March 21, the group, based in Brazil’s top grains state Mato Grosso, blames a prolonged economic crisis, along with adverse climate conditions and currency swings, for its financial woes. The letter was signed by the group but not by any particular executive.

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Argentina’s economy sharply contracted in the fourth quarter while unemployment rose, potentially hurting President Mauricio Macri’s approval ratings as he seeks re-election later this year, Bloomberg News reported. Gross domestic product fell 6.2 percent from a year ago, the country’s statistics institute said on Thursday. It was the worst quarterly performance since 2009 after the global financial crisis, although Argentine economic data was considered unreliable until 2016. Analysts had forecast a 6.4 percent contraction.

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After defaulting in November, embattled Brazilian construction giant Odebrecht Engenharia e Construcao SA appeared determined to move quickly to negotiate with creditors, Bloomberg News reported. One month later, the company began talks with some of its largest bondholders, granting them access to confidential information and agreeing to reimburse them for some fees. The two sides held follow-up conversations as a prelude to a sitdown in New York on Feb. 27, when the Brazilian company was due to present its proposal to restructure around $3 billion of debt. Odebrecht wasn’t ready, though.

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All Avianca Brasil flights were operating normally, a spokeswoman for the carrier said on Tuesday, a day after a Brazilian appeals judge lifted an order that allowed the carrier to operate 10 of its planes despite missed leasing payments, Reuters reported. She added that the decision, which could disrupt the airline’s ability to complete scheduled flights, would be appealed. The ruling, a copy of which was reviewed by Reuters, is the latest development in a bitter legal fight between lessors and the carrier, which is going through bankruptcy protection.

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A Brazilian appeals judge on Monday lifted an order that allowed struggling carrier Avianca Brasil to operate 10 of its planes despite missed leasing payments, Reuters reported. The decision is the latest development in a bitter legal fight between lessors and the carrier, which is going through bankruptcy protection, and which could disrupt the airline’s ability to complete scheduled flights. Avianca Brasil could still seek an emergency injunction in Brazil’s Superior Court of Justice.

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Brazilian airline Azul SA hopes to take over 30 of struggling Avianca Brasil’s aircraft at cheaper lease rates, take control of two-thirds of Avianca’s airport slots and rehire many of its workers, while avoiding its crippling debts and any labor disputes, Chief Executive John Rodgerson said on Thursday. If the bid is successful, it would restructure the domestic Brazilian air travel market, reducing the number of big players from four to three, Reuters reported.

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As the political crisis in Venezuela rumbles on, a number of creditors are squaring up in what promises to be one of the most complicated debt restructurings in history, the Financial Times reported. What will make a workout so tricky to resolve is not just the amount of IOUs sitting on the balance sheet of the South American nation, the fourth-largest economy in the region, but the diversity of its creditor base. In recent months, some aggrieved lenders have filed lawsuits against the government and the state-owned oil company, PDVSA, sparking some unease from the rest.

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Are investors becoming too ebullient on emerging markets once more? The warm welcome recently extended by the bond market to Ecuador — a serial defaulter — seems a good example of the triumph of hope over experience. The Latin American country has defaulted on its debt with such regularity that it repaid a bond fully and on time for the first time in its history only in 2015, the Financial Times reported.

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