Citi’s ambassador to China continues to bang the drum for LatAm. He is optimistic, especially about Asian investment in the region.
by James Crombie
Yearly Archives: 2008
Posted inDaily Brief
Brazil’s TAM Appoints New Board Members
Shareholder Marcos Adolfo Tadeu Senamo Amaro and Alexandre Goncalves Silva, former CEO of General Electric in Brazil, were elected to the board of directors of Brazilian airline TAM at its ordinary general assembly. There were no other changes to the board, TAM says.
Posted inDaily Brief
Ikea Enters LatAm Through DR
Swedish home furnishings giant Ikea is investing $65m in the construction of its first store in LatAm, to be located in the Dominican Republic. The building is expected to be completed in December 2009, and once opened will create 400 new jobs, according to the Dominican government. As of 2007, Ikea had 260 stores in 35 countries, according to its website.
Posted inDaily Brief
Fitch Upgrades Rodonorte Debentures
Fitch has raised the local scale rating on BRL85m debentures due in 2010 of Brazil’s Rodonorte A- from BBB+. The upgrade reflects the strengthening of Rodonorte’s financial profile, the agency says, and factors in reduced political risk due to a more reliable regulatory environment. “The latter factor should allow the company to implement tariff readjustments on the date scheduled by the concession contract, reducing potential pressures on its cash flow,” Fitch says. The rating is also bolstered by a guarantee structure, which considers the pledge of revenues and assignment of potential indemnities received. Rodonorte is the concessionaire for 560km of highways, 480km of toll highways and 80km of access stretches in the Brazilian state of Parana.
Posted inDaily Brief
US Remittances Hold Steady Despite Fewer Senders
Even though fewer Latin Americans are sending money home regularly, the volume of remittances from the US to LatAm – forecast at around $45.9bn this year – will be unchanged in 2008 versus the previous two years, according to a survey by IDB’s Multilateral Investment Fund (MIF).The poll, conducted in February among 5,000 LatAm adults living in the US, found that just 50% of respondents were still sending money on a regular basis, down from 73% in a similar poll conducted in 2006, the fund says. The principal causes cited by migrants were a slowdown in the US economy and a harsher climate against immigration, MIF says. But those who continue to convey remittances are doing so more frequently and for larger amounts, according to the survey. “Starting in 2000, remittances from the United States to Latin America grew steadily, as more immigrants sent more money more often to their relatives back home. During the past several months, however, this pattern has changed dramatically,” says MIF general manager Donald Terry.
Posted inDaily Brief
Talks Expected to Continue on Sidor
Ternium expects to continue negotiating with the Venezuelan government on nationalization of its Sidor unit. The country’s national assembly passed a resolution declaring the company’s shares of the metal processor, together with all of its goods, as assets of public and social interest. “This resolution authorizes the Venezuelan government to take any action it may deem appropriate in connection with any such assets, which may include expropriation,” Ternium says. Talks are anticipated to continue next week, even after Venezuelan president Hugo Chavez threatened to nationalize the metal processor if an agreement was not reached by last Tuesday. The two sides remain far apart. The president places the value of Sidor at $800m, while Ternium wants $3.2bn-$4.8bn.
Posted inDaily Brief
Ecuador Rejects America Movil Concession
The Ecuadorean government has rejected America Movil’s $307m offer to maintain its mobile phone concession in the Andean country, according to Senatel, the country’s telecoms regulator. The Mexico-based firm, which operates in Ecuador through its Porta subsidiary, will continue to do so until August of this year, when the concession expires, Senatel says. Telefonica’s Movistar pledged $200m to maintain its concession in Ecuador, where it has 26% market share, the regulator says. Porta controls almost 70% of the market. A spokeswoman at America Movil declines to comment, adding that the company has not being officially notified of the measure.
Posted inDaily Brief
Ecuador Prioritizes Banco del Sur
Ecuador will discuss the constitution of Fondo del Sur – an alternative to IMF and World Bank for LatAm suggested by Ecuadorean president Rafael Correa a year ago – after the Banco del Sur is established, according to Fausto Ortiz de la Cadena, the country’s finance minister. In the meantime, the Andean nation plans to invest $400m in Banco del Sur and expects to borrow up to 8x that amount once the multilateral is consolidated, wires report.
Posted inDaily Brief
Spanish Firm Wins Peru Transmission Bid
Spain’s Empresa Isonor Transmision has been awarded two 30-year concessions totaling $181m by Peru’s Proinversion privatization agency to build and operate transmission lines. The 760km Mantaro-Carveli-Montalvo line should require investment of $145.6m, while a 200-kilometer Machupicchu-Cotaruse line needs $35.4m. The electricity is expected to be used partly for several mines being developed in the southern part of Peru. Isonor beat out Interconexion Electrica of Colombia, Terna Participacoes of Brazil and Abengoa Peru. Abengoa won a 30-year concession in Feburary for the 700km $106.1m Carhuamayo-Carhuaquero line, for which WestLB is arranging financing.
Posted inDaily Brief
IDB Approves Financing for Brazil’s Sabesp
The IDB has approved a $250m 15-year loan for Sabesp, the water and wastewater company of the state of Sao Paulo, Brazil, to support capital investment. The multilateral will provide Sabesp an A loan of up to $100m from ordinary capital and a syndicated B loan of up to $150m from commercial banks to help finance part of the utility’s 2007–2010 capex program. Funds will also be used to refinance part of Sabesp’s debt, including a eurobond maturing in June 2008. Pricing and terms were not disclosed. The deal is not guaranteed by the sovereign.