Category: Brazil

Spanish power company Iberdrola plans to invest $510 million to increase its installed capacity and improve its distribution networks in Mexico and Brazil. The company’s installed capacity in Mexico currently stands at 2,700 megawatts and the company hopes to bump that number up to 5,000 megawatts by 2007. Iberdrola also plans to expand in Greece and Portugal, where it has recently begun operations.

The Brazilian government has confirmed Elifas Gurgel do Amaral, 49, as president of Anatel, the federal telecom regulatory agency. Gurgel, an engineer and reserve army colonel, had taken over on an ad hoc basis in January. He is a close ally of Communications Minister Eunício Oliveira and member of the PMDB party, a member of the ruling coalition. The government picked Gurgel over senior career Anatel officials, despite opposition from Finance Minister Antonio Palocci and telecom operators concerned that nominally independent Anatel is losing its autonomy. Brazil has one of the largest and fastest-growing telecom markets in the developing world.

Brazil’s prosecutor-general asked the Supreme Court to investigate allegations that central bank president Henrique Meirelles has evaded taxes and performed illegal international money transfers. In August, President Lula da Silva issued a decree granting central bank presidents the status of cabinet minister, which means they may be tried only by the Supreme Court.

Brazil’s biggest mining company Cia. Vale do Rio Doce (CVRD) says it has increased its program of committed bank lines to $650 million from $500 million. A syndicate led by HSBC structured the transaction to ensure disbursement independent of shifts in sovereign risk. The new two-year facility has an annual commission fee of 0.3%, and annual interest rate of 075% over Libor if Vale activates the loan. Vale began the backstop program in May 2004 but has not had to draw on the line.

Brazil’s Paranapanema mining group earned $44.4 million in 2004, ending six years of losses. The company is now negotiating with the government’s BNDES development bank to convert its $100 million debt into equity. Pension funds led by Previ, the country’s largest, control the company and will convert $200 million in corporate bonds into equity before they mature in 2007.