BTG Contains Panamericano Risk

BTG Pactual plans to keep Panamericano as an independent business, separate from its investment banking, asset and wealth management platforms, COO Roberto Sallouti tells LatinFinance. “This is an independent platform in a JV with Caixa, that’s why it makes sense for us,” says Sallouti. BTG agreed to acquire Silvio Santos’ 37.94% stake in Panamericano for BRL 450m. “We will meet at the board level,” but Panamericano will have a separate management team and balance sheet, he adds. Jose Luiz Acar Pedro, a current BTG Pactual partner, will become the new head of Panamericano. “We are not going merge the institutions,” Sallouti says. Although Panamericano will be kept separate from BTG’s other, more tightly integrated units, Sallouti rejects the idea that BTG plans to resell the retail lender once it has cleaned it up. “That is not our intention at all. Our intention is to have this as a fourth line of business.” Sallouti says BTG will remain insulated from any liability incurred by the approximately BRL3.8bn in loans Silvio Santos took from Brazil’s Fundo Garantidor de Creditos (FGC) to plug losses that recently climbed to BRL4bn, and would not be assuming those rescue loans as debt. Prior to the announcement, bankers in New York and Sao Paulo had speculated that BTG may be receiving guarantees from the central government against any additional asset impairment. But Sallouti says BTG gets no such guarantees. “We are receiving a bank which has been audited after having been searched for fraud by the central bank, the FGC, Price and Deloitte. So that gives us comfort,” Sallouti says. Meanwhile, Brazil’s federal savings bank agrees to maintain its 36.56% stake in Panamericano, which it announced it would acquire for BRL739m in July of last year. Moody’s kept Panamericano’s ratings on review for a possible downgrade following the deal announcement. According to the agency, the sale of control reduces uncertainties about the future of the bank and its immediate capital defi