Category: Brazil

Financially troubled Brazilian airline Varig is in talks to sell its 49 percent stake in Uruguayan carrier Pluna to Venezuela’s Conviasa to boost cash flow and pay off debt. The airline, which filed for bankruptcy protection last month, owes creditors $3.8 billion and is currently preparing a recovery plan.

Brazilian retail sales rose 2.7 in May, the slowest pace in three months, as higher borrowing costs weighed on consumer spending. The central bank in May interrupted nine months of interest rate increases that left the benchmark lending rate at 19.75 percent, the highest in 18 months. Economists said the higher cost of financing will help the bank bring down inflation to its 5.1 percent year-end target.

Brazilian steelmaker Companhia Siderurgica Nacional (CSN) has reopened a recent perpetual bond deal to raise another $100 million to $200 million. The company originally issued $500 million worth of the perpetuities, which were priced to yield 9.625%. Credit Suisse First Boston (CSFB) and Deutsche Bank coordinated the operation.

to join discussions at Brazil – The Way Forward, The 3rd Brazil Investment Forum in Rio de Janeiro, 31 Aug – 1 Sep 2005. Apply for your invitation today at www.latinfinance.com/brazil

Tranchesi Arrested Brazilian federal police and prosecutors raided Daslu, a Sao Paulo department store famous for selling Gucci, Prada and Chanel products, and arrested its owner Eliana Tranchesi on allegations of tax evasion. More than two hundred police officers, prosecutors and tax and customs agents raided Daslu to confiscate clothing, receipts and other items.

to join discussions at Brazil – The Way Forward, The 3rd Brazil Investment Forum in Rio de Janeiro, 31 Aug – 1 Sep 2005. Apply for your invitation today at www.latinfinance.com/brazil

Venezuela proposed the creation of a debt market for emerging market countries, saying it may purchase bonds from Argentina, Bolivia, Brazil and Ecuador. Finance Minister Nelson Merentes said that countries joining the market would purchase one another’s debt. Venezuela has already purchased $300 million of Argentine bonds this year and says it plans to buy $200 million more.

The newly-appointed leadership of Brazil´s ruling Workers´ Party plans to summon Finance Minister Antonio Palocci and other party cabinet ministers to explain their performance amid mounting pressure to reverse economic policy. Senator Eduardo Suplicy said the move is an attempt to help, not control, implementation of state policies. Many Workers´ Party politicians want President Luiz Inacio Lula da Silva to reverse course on spending cuts he began imposing in February 2003.

Aracruz Celulose, Latin America’s biggest pulp exporter, saw its second-quarter profit more than triple to $207 million as the Brazilian real rose and debt costs tumbled. The real gained 19 percent in the second-quarter, helping Aracruz reduce the cost of paying its $1.76 billion of debt, which is 75 percent linked to the U.S. dollar. The company´s sales fell 9 percent to $342 million.

Brazil’s Federal Police detained deputy Joao Batista Ramos da Silva, from the opposition Liberal Front Party, and six other people found carrying $2.6 million in Brasilia´s airport. Silva told police the money was tithes collected at a Protestant church. The president of the Liberal Front Party, Jorge Bornhausen, called a meeting of the party’s executive committee, saying he considered the incident “very serious.”