Paraguay is being sued by nine European banks who are demanding the payment of a $85 million debt dating back to 1986-1987. A Swiss court has ruled that the debt, a result of fraudulent loans taken out in the name of Paraguay and allegedly involving the complicit knowledge of then president of Paraguay, Alfredo Stroessner, must be settled by the present government of the country. Paraguay says it will not comply and will take the case to the International Court of Justice in the Hague. The banks involved include: Banca di Roma International, Banca Popolare di Milano, Banque Buxelles Lambert, Cassa di Risparmio di Torino and DG Bank.
Category: Regions
Posted inDaily Brief
Chávez Embraces Bolivia
Venezuela President Hugo Chávez’s visit to Bolivia has concluded with the signing of 16 cooperation agreements which will further cement the close relationship between Chávez and Bolivian counterpart Evo Morales and heighten the nervousness of some foreign investors. Venezuela has announced, presumably much to the chagrin of Brazilian oil operator Petrobras, that it will invest $1.5 billion into the Bolivian energy sector via its state-owned oil entity PDVSA. In addition, it has said it is committed to buy $100 million of Bolivian debt. This would certainly help Morales’ government with its budget shortfall this year, and is in line with Chávez’s goal to promote a regional capital market.
Posted inDaily Brief
Alsea Raises $68 Million
Mexican fast-food operator Alsea has raised $68 million via a secondary share offering, less than the $85.5 million it had expected to sell. The sale, which was postponed from May 25 following the slide in the Mexican bolsa which reflected the worldwide slump in emerging markets, comprised 18 million shares at a price of 42 pesos per share ($3.78). The sale was managed by the Mexican unit of Banco Santander Central Hispano.
Posted inDaily Brief
Peru May Go Long In Local Market
Peru is contemplating placing 30-year bonds in the local market, making them the longest maturing local-currency bonds issued by the sovereign to date. (Peru sold 20-year sol-denominated bonds on May 2, raising $40 million.) The government is considering issuing the longer-term paper to cover debt incurred from agrarian reform in the 1960s. Almost $1.5 billion of debt is still owed to landowners whose land was expropriated by the state. The bonds would be denominated in local currency and carry a fixed interest rate. No possible date was revealed for the offering.
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Ecuador Foreign Trade Minister Resigns
Ecuador’s foreign trade minister, Jorge Illingworth, resigned yesterday, Wednesday, after only eight months in the job. He has been replaced, temporarily, by Manuel Chiriboga, Ecuador’s chief negotiator in the free trade talks with the US. A new minister will be named within the next few days.
Posted inDaily Brief
Ecuador Will Not Seize Oxy Pipeline Shares
Ecuador has said it will not seize the shares held by the US oil company Occidental Petroleum (Oxy) in the heavy oil pipeline Oleoducto de Crudos Pesados (OCP) Ecuador. Last week the government cancelled Oxy’s oil production agreement and took control of its assets in the country. Oxy has a 14.15% stake in OCP, the only private pipeline in operation in Ecuador, which has the capacity to transport up to 450,000 barrels of oil per day.
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Uribe Set For Re-election
Colombia’s president, Alvaro Uribe, looks set to be returned to office for another four-year term this Sunday. His record on national security, as well as economic management, have ensured approval ratings recently of around 60% and have seen investor confidence in the country boosted. His pro-free trade stance, as well as his program of privatization, are rare in the region. If returned to power, he will become the first Colombian president to serve two consecutive terms after Congress last year approved constitutional amendments allowing the president to stand for re-election.
Posted inDaily Brief
Bridgestone To Build Mexico Plant
Japanese tire manufacturer Bridgestone is to spend $81 million building a carbon black processing plant in Mexico. The plant, to be located in the port of Altamira, in the northern state of Tamaulipas, will boost the company’s global production and is due to be operational by June 2008.
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Gruma Expands Into Russia
Mexican company Gruma, the world’s largest manufacturer of tortillas, is to build two plants in Russia for an initial cost of $100 million. The plants are located in Moscow and will serve that region as well as northern Germany. Gruma already operates in Latin America, the US, Europe, and Australia. Last August it opened a plant in China and plans to expand its operations in Asia as well as looking at moving into Africa.
Posted inDaily Brief
Colombian Energy Firms Invest In Peru
Colombia’s state-owned electricity company Interconexión Eléctrica (ISA) and state-run Empresa de Energía de Bogotá (EEB) have bought a stake in Hydro-Quebec’s Peruvian subsidiary Consorcio TransMantaro. The companies paid $67 million for the 57% share in the Canadian company’s subsidiary. ISA is Colombia’s largest energy provider.