Brazil's government is expected to back a bill proposing a 10% cut to federal tax breaks, two sources told Reuters on Thursday, in a move that could allow it to scrap a controversial increase in the tax on financial transactions (IOF) proposed last month. The bill, which was proposed by lower house lawmaker Mauro Benevides, sets a 5% reduction in the value of tax benefits in 2025 and a further 5% cut in 2026, the proposal showed. The legislation also applies to fiscal and credit benefits.

Azul said it received interim court approvals related to the company’s chapter 11 petitions filed in the U.S., WSJ Pro Bankruptcy reported. The court granted approval for the Brazilian airline operator to access $250 million of its $1.6 billion debtor-in-possession financing after a first-day hearing.

Shares of airline Azul plunged on Wednesday after the Brazilian company filed for Chapter 11 bankruptcy protection in the United States, despite months of efforts to restructure mostly pandemic-era debt, Reuters reported. The filing, which may scupper a potential merger with peer Gol, makes the carrier the latest in a series of Latin American airlines to file for bankruptcy in the aftermath of the depression the industry suffered in the initial months of COVID-19. U.S-listed shares of Azul fell some 40% in premarket trade, making a 70% decrease in its stock year to date.

Brazilian renewable energy company Rio Alto Energias Renovaveis SA is working with financial advisory firm Laplace Finanças and law firm Felsberg Advogados as debt restructuring advisers, Bloomberg News reported. Laplace and Felsberg have been helping Rio Alto negotiate with its creditors to reach an agreement as the company seeks to avoid filing for bankruptcy protection.

Brazilian airline Gol said on Tuesday its restructuring plan under Chapter 11 bankruptcy proceedings has been approved by a U.S. court, Reuters reported. The Brazilian carrier, which has been in bankruptcy proceedings since early 2024, told Reuters it expects to exit chapter 11 in June. Read more.

Brazil's government is not considering providing specific aid for Azul as the airline faces financial hurdles, but money from a local fund will soon be available for carriers, tourism minister Celso Sabino said on Monday, Reuters reported. "The Brazilian government does not intent to grant any kind of benefit to a particular company. The government thinks of the sector as a whole," Sabino said on the sidelines of an event in Rio de Janeiro.

The surge in popularity of U.S. dollar-backed stablecoins as a way of transferring money abroad is increasing the volatility of Brazilian capital flows, Brazil's central bank deputy governor said on Tuesday, Reuters reported. Brazilians' crypto asset usage has surged over the past two to three years, with around 90% of the flow linked to stablecoins - digital money pegged to leading currencies like the U.S. dollar - its central bank estimates.

Brazil's central bank raised interest rates by 50 basis points on Wednesday in a sixth straight hike that pushed borrowing costs to their highest in nearly 20 years, and left future steps open amid global uncertainties and sticky domestic inflation, Reuters reported. The bank's monetary policy committee, known as Copom, raised the Selic to 14.75% in a unanimous decision.