Canada’s Bank of Nova Scotia is seeking more than $600 million in damages from the Argentine government, blaming actions by authorities for the losses it suffered when it shut down its Argentine banking unit, Quilmes, during the economic crisis in 2002. When the Argentine government revoked Quilmes’ license the bank had 91 branches and 1,700 employees.
Category: Paywall
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Gol’s Revenue Rises
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.
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TAM to Sell Shares
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.
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Argentina: Iglesias Predicts Growth
Argentina will continue to attract investors as its economy expands, according to Enrique Iglesias, president of the Inter-American Development Bank. Argentina’s GDP grew 9.1 percent in the fourth quarter of 2004. Exports have jumped 34 percent over the past two years and consumers are becoming more confident about spending as unemployment falls. The country’s jobless rate dropped to 12.1 percent at the end of 2004, the lowest level in a decade.
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Gutiérrez Holds On
Ecuadorian President Lucio Gutiérrez said he would not step down in spite of calls for his resignation from protestors and political opponents. Thousands of people took to the streets of Quito late last week to protest his decision to dissolve the Supreme Court. Gutiérrez declared a state of emergency to stop the protests but quickly revoked the measure Saturday after the military and police refused to take action against the protestors.
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Telmex to Sell MCI Shares
Mexico’s dominant fixed-line telecom company Telmex, owned by Carlos Slim, has agreed to sell its shares in MCI to Verzion Communications. Telmex has 8.1% of the company. The agreement was reached after more than two months of negotiations between MCI, Qwest Communications and Verizon.
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Asian Lessons
Twice a year, the international financial community – which is made up of thousands of bankers and bureaucrats – comes together for a few days to network, listen to speeches, do deals and go partying. These annual gatherings are held around the meetings of the Inter-American Development in April and the International Monetary Fund in September. More to the point, discussions and negotiations at these meetings are often overshadowed by some catastrophic Latin American crisis.
But it was clear at this year’s IADB meeting – which has just ended – that Latin America is of less and less interest to the outside world. Holding the meetings in remote Okinawa did not ease this sense of isolation. In a way, the lack of interest is positive: there are no crises on the horizon in Latin America. But instead of patting each other on the back, Latin Americans are agonizing about their irrelevance.
Many bankers are going on to Tokyo, Shanghai, Beijing, Hong Kong, Taipei, Singapore and even Mumbai to hunt down investors or possible M&A clients. Ten or 20 years ago, Asia was mostly a backward region disconnected from global markets. Now, Latin America is falling behind Asia. The good news is that leaders, bankers and business leaders – once stunned into inaction by the rise of China – are reacting. Companies are becoming more international. Governments are sticking to sound economic and social policies. With time, growth rates may raise to 5%-6% a year. That would be a triumph for Latin America but mediocre in comparison with Asia.
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Heineken Eyes Bavaria
Heineken announced that it is among companies interested in buying Colombia’s Grupo Empresarial Bavaria as demand for beer in emerging markets outpaces consumption in the US and Western Europe. Fourteen percent of Heineken’s sales last year came from the Americas.
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Vale Plans Big Investments
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.
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Bielsa: G7 Supports Argentina
Argentina’s Foreign Minister Rafael Bielsa said a majority of the Group of Seven industrialized nations backs the country’s debt exchange plan. This comes as the IMF is pushing Argentina to start talks with creditors who rejected the swap offer. Bielsa said the restructuring plan is backed by Germany, the US, France and Canada, while the UK and Japan have given “mixed” signals. Italy opposes the offer. Argentina persuaded 76 percent of its bondholders to exchange their holdings for new securities, while holders of about $20 billion in bonds rejected the offer.