South America

Brazilian engineering conglomerate Grupo OAS expects revenue to shrink more than 50 percent by 2017 as it sells operations and refocuses on civil construction after filing for bankruptcy protection due to a bribery scandal at a state-run oil company, Reuters reported. The filing by OAS, the third-biggest builder in Brazil last year, was the highest-profile bankruptcy filing to follow a sweeping police investigation of a price-fixing and kickback scheme at state-controlled Petroleo Brasileiro SA, or Petrobras.
Read more

Argentina Casts A Wide Net For Cash

Argentina’s thirst for dollars has been temporarily quenched by a $1.4bn bond sale but a state visit to Russia this week is unlikely to yield significant support for its languishing economy, the Financial Times reported. Hindered from issuing debt in international capital markets by a long-running dispute with a group of holdout hedge funds, Argentina succeeded in issuing dollar-denominated debt under local law on Tuesday to bolster precariously low foreign exchange reserves.
Read more
Forty-three percent of companies in Colombia's oil sector are at high risk of going bankrupt as the industry reels from the recent halving of oil prices, according to a survey presented to the Andean country's congress this week, Reuters reported. The survey by the Colombia's companies' regulator polled 53 companies with total assets of about $10 billion but it did not include state-run oil producer Ecopetrol or two Toronto-listed companies, Pacific Rubiales Energy Corp and Canacol Energy Ltd.
Read more
A reorganization plan to help oil rig supplier Sete Brasil Participações SA remain in business should be ready by the end of June, after shareholders and creditors agreed to extend financing as credit dried up, the president of Brazil's state development bank BNDES said on Thursday. Last week, commercial banks signed a memorandum of understanding to avert demanding repayment of as much as 11 billion reais ($3.7 billion) in loans to Sete Brasil that matured this month, extending them for a further 90 days.
Read more
Police arrested the treasurer of Brazil's ruling Workers' Party on Wednesday, bringing the country's largest corruption scandal a step closer to President Dilma Rousseff's government, The Sydney Morning Herald reported. Joao Vaccari Neto was arrested in connection with a probe into money laundering and illegal donations to the party, public prosecutor Carlos Lima said. Mr Neto is the latest the latest prominent Brazilian caught up in a multibillion-dollar probe.
Read more
Creditors of Brazil's OGX Petroleo e Gas, the bankrupt oil company created by tycoon Eike Batista, agreed not to execute payments or guarantees stipulated in a debtor-in-possession (DIP) financing secured in 2014 by the company, Reuters reported. In a filing published on Friday, the company said creditors agreed to convert DIP financing into common shares of OGX as stipulated in the financial agreement. Creditors would refrain from any new judicial demands or ask for early repayment, the filing said.
Read more

Brazil Probes Alleged Mass Tax Fraud

Prosecutors are investigating allegations that Brazilian tax authorities solicited bribes from major companies in exchange for reducing their liabilities in corporate tax disputes, officials say, The Wall Street Journal reported. On Tuesday, the Finance Ministry said the alleged scheme wasn’t systematic but rather, involved “isolated acts” carried out by a small group of government tax officials. When prosecutors announced the investigation on March 26 they said that losses to the nation’s treasury totaled $6.1 billion over 15 years.
Read more
Schahin Petroleo & Gas SA, a rig and platform supplier to Brazil’s state-run producer, is seeking a credit line to avoid filing for bankruptcy protection, said two people familiar with the matter. Bonds tumbled, Bloomberg News reported. Schahin, which supplies Petroleo Brasileiro SA with offshore drilling rigs and production platforms, is temporarily halting operations at five of the units it has leased to Petrobras, it said in an e-mailed statement.
Read more
A Brazilian state court accepted a bankruptcy protection request filed by engineering conglomerate Grupo OAS for nine of its units, in the largest corporate failure yet related to the snowballing Petróleo Brasileiro SA corruption scandal. The decision on Thursday by Judge Daniel Carnio Costa at São Paulo State's 1st District of Judicial Recoveries allows Grupo OAS to begin steps to renegotiate about 8 billion reais ($2.5 billion) in debt, according to a statement. OAS has 60 days to present a debt restructuring proposal to all creditors.
Read more