A court decision in the Amazon rainforest city of Sinop that shielded a corn and soybean producer’s land from seizure by creditors is reverberating through Faria Lima Avenue, the Brazilian equivalent to Wall Street, Bloomberg News reported. The ruling is raising concerns among lenders that it may be harder than anticipated to take control of acreage pledged as backing for agribusiness receivables certificates, or CRAs, a class of relatively new fixed-income securities used to finance grain and oilseed growers.
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South America
Elliott Investment Management is the leading bidder in a U.S. court-ordered auction of the parent company of Venezuelan-owned refiner Citgo Petroleum Corp., Bloomberg News reported. Elliott was competing against bidders including independent refiner Vitol Group and Canadian miner Gold Reserve Inc., which was working on a joint bid with billionaire Carl Icahn’s CVR Energy. Elliott has now been granted exclusivity to negotiate a deal. The auction process has been long and winding, and Elliott’s emergence as the top contender doesn’t necessarily mean it will end up with the asset.
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Brazil's central bank chief said on Saturday that discussing monetary policy transmission will become increasingly difficult without addressing fiscal issues, citing the growing burden of public debt driven by expanded government spending, Reuters reported. Roberto Campos Neto stressed that income transfer programs implemented during the pandemic are now larger and have become permanent. In Brazil, 50 million people are "gaining money from the government compared to 43 million people who are employees and entrepreneurs," he added.
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Brazil is sketching out a plan to provide mid-sized companies with better access to the country’s capital markets, part of an effort by President Luiz Inacio Lula da Silva to bolster growth, Bloomberg News reported. The goal is to make it easier for companies to tap debt or equity markets, according to Marcos Pinto, secretary for economic reforms. The ideas, which are still being hashed out, include lowering fees associated with issuances and simplifying audit requirements, he said in an interview.
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Argentina's economic activity likely fell in June versus the same month a year earlier, analysts said, back in the red after a rare rise the month before amid tough austerity measures and cost-cutting under libertarian President Javier Milei, Reuters reported. The median forecast from 16 analysts sees economic activity down 1.9% year-on-year in the sixth month of the year, dropping back from May's 2.3% rise, as growth in the grains and gas sectors is weighed down by weak consumption and construction.
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Chile’s economy contracted on a quarterly basis for the first time in a year, marking a significant downturn that bolsters the case for a resumption of interest rate cuts, Bloomberg News reported. Gross domestic product fell 0.6% in the second quarter from the prior three months, in line with the median forecast of analysts in a Bloomberg survey. From a year ago, it expanded 1.6%, the central bank reported on Monday. Chilean policymakers paused their easing cycle last month as they weighed near-term inflationary pressures against a downturn in the economic recovery.
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Brazilian airlines, already struggling with high interest rates and volatile fuel costs, are being hit with more losses as currency woes and climate challenges test the sector’s operational resilience, Bloomberg News reported. Azul SA and Gol Linhas Aereas Inteligentes SA, two of the nation’s largest carriers, reported setbacks in the second quarter as a weakening Brazilian real and the closing of a key airport following torrential rains in country’s south dragged their earnings, quarterly reports showed this week.
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Troubled Chilean salmon-farming company Nova Austral appears to have been given the go-ahead to continue with its reorganization, Fish Farmer Magazine reported. Following a new appeal by the company and other organizations, a court in the south of the country has permanently reversed a bankruptcy order. A temporary appeal was allowed in May. This means a long running saga, and a series of delays which saw the business come close to being wound up or sold, should at last be over.
The owner of the beauty brand Avon in the U.K., Europe and Latin America has filed for bankruptcy as it tries to off-load more than $1bn of debt, including millions of dollars in liabilities linked to lawsuits alleging that talc in its products caused cancer, The Guardian reported. Avon Products Inc., a subsidiary of Brazil’s Natura, which bought Avon’s non-North American trading businesses in 2020, has filed for chapter 11, the American version of administration. API said that the process would allow it to address its debt obligations in an “orderly manner”.
Natura &Co posted strong Q2 2024 earnings, but Avon's chapter 11 filing added challenges and a significant net loss, Finimize reported. Natura &Co surprised the market with better-than-expected core earnings for Q2 2024. The beauty giant reported net revenue of 7.35 billion reais ($1.34 billion), a 5.4% rise from last year, beating forecasted revenue of 6.78 billion reais. Adjusted EBITDA also climbed 14.2% to 803.5 million reais, surpassing the expected 763.8 million reais. Success in Brazil and Mexico drove this performance, as highlighted by the CEO.