Brazil

Azul and Gol, two of Brazil's largest airlines, are moving a step closer to a sweeping merger that would create a dominant carrier in Latin America's No. 1 economy, a securities filing showed on Wednesday. The union of the two companies, which follows months of talks and market speculation, would hold roughly 60% of the domestic market, far surpassing the local unit of Chile-based LATAM Airlines.

Brazil’s economic activity barely grew on the month in November as central bankers try to tame consumer demand by raising interest rates, Bloomberg News reported. The central bank’s economic activity index, a proxy for gross domestic product, ticked up 0.1% from the month prior, slightly above the forecast for no change from economists in a Bloomberg survey. From a year before, the gauge grew 4.11%, according to a report published Thursday. The bank also revised October’s monthly growth to 0.09% from 0.14% before.

Brazilian airline Gol released a revised five-year strategic plan on Wednesday as it prepares to exit chapter 11 bankruptcy proceedings, saying that the new forecasts would serve as a base for its reorganization, Reuters reported. Gol said in a securities filing that it expects to emerge from chapter 11 in May, and sees its net leverage "substantially improving" going forward as it rebuilds its network and returns to "normal levels" of core earnings by next year.

Brazil’s industrial output fell for the second straight month, signaling that tight financial conditions are taking toll on the credit-dependent sector as the central bank prepares to take interest rates even higher, Bloomberg News reported. Production declined 0.6% in November from the month prior, just less than the median estimate of a 0.7% drop from analysts in a Bloomberg survey. Industry gained 1.7% from a year earlier, the national statistics agency reported Wednesday. Read more.

Brazil's government said on Friday it has reached deals with two of the country's largest airlines, Gol and Azul, to settle some pending tax obligations totaling 7.5 billion reais ($1.22 billion), Reuters reported. The government has provided the carriers with significant discounts and allowed them to make installment payments. The deal may provide financial relief to the companies. Latin American airlines have been facing financial hurdles in the wake of the COVID-19 pandemic and were forced to restructure obligations as they struggle with high debt loads.

Brazilian assets finished the year lagging all major peers, with the real posting its biggest slump since the pandemic shock of 2020 amid mounting skepticism over President Luiz Inacio Lula da Silva’s commitment to fix a ballooning budget deficit, Bloomberg News reported. The real weakened 21% against the US dollar this year, the worst among 31 major currencies alongside Argentina’s tightly controlled peso. Losses accelerated in November after a long-awaited fiscal package underwhelmed investors.

After months of rancor, ties between President Luiz Inacio Lula da Silva and Brazil's central bank look poised for an era of sweetness and light - which is precisely what worries some investors, Reuters reported. Gabriel Galipolo, 42, is set to take the reins at the bank on Wednesday. The former deputy finance minister has earned a reputation for economic views that sometimes stray from his predecessor's embrace of free markets but warm the hearts of left-leaning politicians.

Brazil’s central bank lifted its key interest rate by one percentage point and surprised investors by promising two more hikes of the same size, its strongest move yet to recover investor confidence and tame inflation expectations that have been propelled by public spending and a hot economy, Bloomberg News reported. Board members boosted the Selic to 12.25% late on Wednesday as expected by 14 of 35 economists in a Bloomberg survey, with all others expecting a smaller rise.

GOL Linhas Aéreas Inteligentes S.A. and Abra Group Limited have announced a key step in GOL’s financial restructuring journey, AviationSourceNews.com reported. The airline will file an initial proposed chapter 11 reorganization plan with the U.S. Bankruptcy Court. The filing marks a critical step in addressing its financial challenges and positioning the airline for future growth. This strategic move follows a comprehensive Plan Support Agreement (PSA) signed on November 6, 2024, which involves GOL, Abra Group, their affiliated entities, and the unsecured creditors committee.

Brazil coffee exporters owned by Montesanto Tavares Group Participações SA were granted a 60-day grace period to renegotiate debt with creditors, Bloomberg News reported. The decision, seen by Bloomberg News, was issued Friday by Judge Murilo Silvio de Abreu. The judge earlier this week declined a similar request for a grace period from the two companies owned by Montesanto — Atlântica Exportação e Importação SA and Cafebras Comércio de Cafés do Brasil SA.