Category: Brazil

Citigroup won approval from Brazilian regulators to retake control of three phone companies, defeating a challenge by the former manager of its $728 million investment fund, Daniel Dantas. The decision clears one obstacle to Citigroup’s plans for removing Dantas and the executives he named while he managed the bank’s shares in Brasil Telecom, Brazil’s third-biggest telephone company, and two mobile phone companies. Dantas has been fighting to stay in control of Brasil Telecom since March 9, when he was fired by Citigroup.

Petrobras, Brazil’s state-controlled oil company, is studying offshore oil and natural gas exploration in Pakistan after company officials visited the country last week. The visit by Petrobras officials comes after Pakistan’s President Pervez Musharraf visited Brazilian President Luiz Inácio Lula da Silva in November.

Brazilian steelmaker CSN will pay Brascan Brasil R$100 million ($37 million) in cash and stock for Ersa, a tin mine and foundry in the Amazon state of Rondônia. CSN uses 3,600 tons of tin annually to make tin-coated sheet iron, one of the company’s highest-value products and plans to increase production capacity at the mine to 3,600 tons per year and output at the foundry to 4,800 tons per year by 2009.

Daniel Dantas, former Citigroup manager of a $728 million fund in Brazil, was charged with racketeering and breach of confidentiality in connection with a Brazilian probe into whether he hired security firm Kroll to spy on the government and business rivals. The charges, all of which Dantas has denied to the police, are preliminary and must be confirmed by a Brazilian court.

TAM, Brazil’s second-biggest airline, said it plans to sell shares in an offering to Brazilian and US investors. The Sao Paulo-based airline and its controlling shareholders, including the Amaro family, filed a petition to sell preferred shares as part of the offering. The company has not yet disclosed details of the offering and the dates of the sale.

Brazil’s no-frills airline Gol Linhas Aereas Inteligentes reported first quarter revenue of $225 million, a 36% increase from the same period of 2004. The company’s revenue per seat kilometer rose 6.9% to $8.24. Gol, which started operations in early 2001, became a publicly traded company last year.

Brazilian iron ore giant Companhia Vale do Rio Doce, the world’s largest iron-ore producer, plans to invest $6.2 billion over the next five years to meet rising demand from China. The company is looking to add 140 million metric tons of capacity by 2010, accounting for 37% of global demand. China, the world’s biggest steelmaker, may increase iron-ore imports by 15% this year to 240 million tons.

Brazil’s troubled airline Varig registered net revenue of $3.4 billion in 2004, up 11 percent year-on-year. The company reduced its net loss 95 percent to $34 million, while gross profit totaled $980 million, up 10 percent. Varig finished 2004 with debts worth $2.2 billion, most of which are owed to the Brazilian government.

The International Monetary Fund raised its growth forecasts this year for Mexico and Brazil, predicting that both countries’ economies will expand 3.7 percent, more than the previous 3.2 percent forecast for Mexico and 3.5 percent outlook for Brazil. The IMF called on Latin American countries to take advantage of the economic expansion in the region to reduce debt and broaden the tax collection base to help keep budget deficits under control.