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Companhia aérea deve indenizar passageiro por defeito em ar condicionado

Para a magistrada, a empresa falhou ao expor o reclamante a condições insalubres de voo.

A Azul Linhas Aéreas deverá indenizar um passageiro por defeito em ar condicionado durante voo. A decisão é da juíza de Direito Lilian Deise, do 1º JEC da comarca de Rio Branco/AC.

O autor alegou que, na viagem de Rio Branco/AC a Boa Vista/RR, o avião levantou voo sem o funcionamento do sistema de ar condicionado, por isso, tanto ele como outros passageiros passaram mal estar físico e emocional.

Na sentença, a juíza de Direito Lilian Deise anotou que “de fato, a empresa demandada falhou na prestação de seus serviços aéreos ao expor o reclamante a condições insalubres de voo, qual seja, sem o funcionando do sistema de ar condicionado subtendo-o a uma condição asfixiante e perigosa”.

Afirmando não ser possível afastar “(…) a má prestação serviços da reclamada”, a magistrada asseverou que a empresa “deverá responder independente de culpa pelos prejuízos ocasionados ao seu consumidor, conforme ensina o art. 14, caput, do Código de Defesa do Consumidor”. Sendo assim, condenou a companhia aérea ao pagamento de R$ 7 mil por danos morais.

Processo: 0607573-64.2016.8.01.0070

Fonte: TJ/AC

NEWSLETTER October November 2017 pag.03

October 15, 2017
Amazon offers aggressive fees to fill Brazilian marketplace

Online retailing giant Amazon is offering very favorable fees to attract retail chains to its marketplace. The US company, which this month started venturing beyond books in the Brazilian market, is offering lower fees than those negotiated by B2W and Magazine Luiza. While B2W (which owns Submarino and Americanas.com) has been trying to sign new agreements with an average fee of 12% on the retailer’s sales including discounts on receivables, Amazon has been offering 10% and saying it will not charge for the receivables. Amazon and B2W declined to comment.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 15, 2017
New law would push out banks from cash-in-transit industry

The new Private Security and Financial Institutions Protection bill is mobilizing Congress and may define who can operate in the Brazilian armored-car market. Lawmakers ended up giving in to lobbying from foreign companies that already dominate the industry in the country and even blocked bank-owned enterprises from providing services to other parties. If passed the bill would push out TB Forte, created a decade ago by TecBan, a joint venture of Bradesco, Itaú, Santander, Banco do Brasil, Caixa, and Citibank. Spain’s Prosegur and Brink’s of the US dominate 60% of the cash-in-transit market in Brazil, while TB Forte holds 5%. Lawmakers argue the rule is necessary to keep the segments isolated.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 14, 2017
Petros picks Daniel Lima as new investment director

The pension fund of Petrobras, Petros, has picked economist Daniel Lima as its new investment director. The executive had been working for over a year as asset and liability manager at Itaú Unibanco Foundation, the namesake bank’s pension fund. Mr. Lima, whose hiring was assisted by recruiting firm Heidrick & Struggles, will take a role vacated in May by Mauricio Gutemberg. After winning regulatory confirmation, Mr. Lima faces the task of making Petros’ assets more liquid and of recouping at least some value from unsuccessful investments made in the last few years. With R$60 billion in assets, Petros last month announced a plan to plug a R$27.7 billion deficit.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 14, 2017
Reduction of reserve requirements seen stimulating economy

The positive effects on the economy of a possible easing of bank reserve requirements — especially on the reduction of banking spreads — will compensate for the potential increase in the cost of net debt on the public sector, according to analyses by government economic advisors. This decline in the spread will take place, according to economists, because the banks will no longer be required to maintain a part of their money on deposit in reserve. Last week, Central Bank President Ilan Goldfajn signalled in an interview that he already considers the possibility of reducing reserve requirements. Internal analyses of the government indicate that this process should begin in two categories: term deposits and savings. The view is that the reduction of reserves on cash deposits, whos impact is more concrete, should be carried out at a later time.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 14, 2017
Consumer expectations show lingering concern about recovery

Despite signs of economic recovery, Brazilians remain concerned, believing that inflation could rise and unemployment too. For this reason, they are still stocking up on basic items like sugar, instant coffee, and powdered detergent. Consumers also are learning to live without products like yogurt and cream, among others. This caution is related to the scenario that the population sees for the next six months. Last month, the National Consumer Expectation Index published by Ibope Inteligência and the National Confederation of Industry (CNI) fell 3.1% in comparison to August, to 98.5 points. The retreat reversed growth seen in the previous month and brought the indicator to its lowest level so far this year.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 13, 2017
Market may be too optimistic about growth prospects, says LCA analyst

Economist Francisco Pessoa Faria, of LCA Consultores, is taking a cautious view of the recovery in course in the Brazilian economy. For him, projections for an expansion of around 1% in 2017 and above 3% in 2018, which began to gain strength among some analysts, seem too optimistic and underestimate some factors that weigh against a stronger recovery of activity. That is the case of the minimum wage, which will show a small decline in real terms next year, with a prospect for only gradual improvement of the labor market and modest performance by the farm, auto and mining sectors ahead. Another point, he says, is the possibility that the 2018 elections cause turbulence in the markets, given resistance that may be faced by candidates in favor of fiscal austerity and measures like social security reform. In this scenario, Mr. Pessoa sees growth of 0.7% this year and 2.5% next year next year in an environment of low interest rates.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 13, 2017
Cade mulls rejection of Mataboi purchase by JBJ Agro

The purchase of Mataboi by JBJ Agro will likely be rejected by the Cade anti-trust court. Valor has learned that the rapporteur for the case, Alexandre Cordeiro, will block the deal and is likely to be followed by the other members of the court — unless there is a last-minute reversal. The final decision on the deal should be issued on Wednesday (Oct. 18). To try to save the transaction, the defense of the two companies allege that the maximum allowed timeframe for Cade to rule on the case has already expired, which, according to the law, should permit the automatic approval of the deal. The court is weighing rejection of the deal under suggestions that JBJ Agro owner José Batista Júnior may have coordinated the deal in conjunction with his brothers Joesley and Wesley Batista, executives at JBS, to maximize market advantage for the group. If the other court members opt to also reject the operations, the tendency is for JBJ and Mataboi to file for an appeal in federal courts, according to statements made by Mataboi president José Augusto Carvalho.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 13, 2017
Pension funds still wary of investing in corporate debt

The pursuit of riskier assets by pension funds amid low interest rates is likely to continue avoidance of corporate indebtedness. Aspects ranging from regulation restrictions to the issuances’ profiles prevent these investors from being more aggressive in their strategies, experts say. Pension funds follow Resolution 3,792, of the National Monetary Council, that forbids, for example, investment in securities of privately held companies, as well as limiting to 25% the investor’s participation in the same issue.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 12, 2017
Eletrobras asks court to shelve class action lawsuit in US

Eletrobras has requested the shelving of a class-action lawsuit against the state-run power holding company filed by investors in the US. Eletrobras defended itself with technical and legal arguments, without addressing allegations that it has engaged in a corruption and fraud scheme. The state company only points out that the investors who lead the process knew “the risk and likelihood of corruption in Brazil and at Eletrobras.” The lawsuit is at a crucial point. It is now that Judge John Koeltl will decide whether to “certify” a “class” of investors. Led by US pension fund Providence and investor Dominique Lavoie, they asked the judge to certify the group of all those who traded Eletrobras ADRs between August 2010 and June 2015.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 12, 2017
Automakers flock back to trade show as truck industry recovers

The best barometer of the truck industry’s recovery is not in statistics. The clearest sign is in the number of exhibitors at Fenatran, the largest showcase cargo trucks in Latin America, which starts Monday in São Paulo. In its latest edition, in 2015, only two automakers were present — Sweden’s Volvo and Dutch group Daf. This time, however, eight automakers will be present, as well as manufacturers of equipment, engines and auto parts. At the 2015 Fenatran, the Brazilian truck market had shrank 47% compared to the previous year, to 74,000 units. Despite a recovery, in 2017 figures will be even worse, between 45,000 and 49,000 units, down from the 50,500 in 2016, which was the lowest volume since 1996.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 12, 2017
Specialists approve of changes to BNDES profile

The Brazilian Development Bank (BNDES) will be fine after paying back R$180 billion to the Treasury, banking specialists say, although they admit that the transition won’t be completely pain-free. Also, the reduced presence of the development bank will help spur capital markets, while rightfully returning the BNDES’s focus to smaller companies and sectors such as sanitation, where private investment can be more complicated, says the director of the Center for Capital Market Studies at the Ibmec school, Carlos Antonio Rocca. Although it will take a while for someone to fill the BNDES’s shoes in the market, it’s important to draw down the bank’s operations because they were too costly of a burden for Brazilian society, says Alexandre Assaf Neto, director of the Assaf Institute.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 11, 2017
Government debates on deadline to enact new Refis

Despite having 15 days to enact the new Refis, a corporate debt-repayment program passed by the Senate, there is a conflict between the government’s political and economic wings over whether or not to use the whole period. The doubt lies in which final version of the program companies will join through October 30, when the application period ends. The pressure for a quick presidential enactment, with no vetoes, comes from pro-government politicians, who have the trump card that President Michel Temer needs votes to block the opening of investigations against him. The economic team prefers to wait for the entire deadline, which in theory would make companies securely adhere only to the original version and, depending on Mr. Temer’s situation regarding the corruption charges, would give room for more relevant vetoes.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 11, 2017
Central Bank studies cutting red tape in Brazilian forex market

The Central Bank is considering changing the regulatory framework for foreign exchange trading. The goal of the proposal, which is still in the early stage, is to improve business environment in the forex market, said Tuesday the BC’s director for regulation, Otávio Damaso. One the challenges faced by the Central Bank and other control bodies is to end the “criminalization” stigma in the foreign currency market, Mr. Damaso said. “In many countries, transactions are carried out with much less bureaucracy than here.” The BC is studying how to align Brazilian regulation with international standards.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 11, 2017
Injunction suspends Aneel sanctions against Bioenergy

Brazilian power generator Bioenergy obtained an injunction from the Federal Civil Court of the Federal District that prevents the National Electric Energy Agency (Aneel) from imposing sanctions against the company for failing to comply with the implementation schedule of Marco dos Ventos 1 and 2 wind farms in Maranhão. The two projects, purchased at an auction in 2011, have installed capacity of 28.8 megawatts each. According to the injunction, the power generator was not able to build the parks for reasons beyond its control. With the decision, Aneel is prevented from imposing sanctions until the case is tried by the court, which will determine if any penalty can be applied.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 10, 2017
Lula is a candidate even if arrested, says Vox Populi researcher

A year from the presidential elections, former President Luiz Inacio Lula da Silva (Workers’ Party, PT) does not have an opponent capable of challenging his popularity, and the right-wing alternative, represented by Jair Bolsonaro (Social Christian Party, PSC, of Rio de Janeiro), is too radical for the majority of voters to be able to prevent a PT victory, says João Francisco Meira, a political scientist and partner at research company Vox Populi, in Belo Horizonte. Aside from those two candidates — who have taken first and second place in all polls for months —, one candidate who seems to have the potential to attract a significant share of centrist voters is former Federal Supreme Court Justice Joaquim Barbosa, who has no party. Mr. Meira says he is skeptical that Mr. Lula’s candidacy would be blocked by courts. “Even if he is in jail, he is a candidate.”
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 10, 2017
Gol in talks to join SkyTeam global alliance

Gol, which until now was not member of any global alliance, is negotiating agreements with SkyTeam, the second-largest alliance in the world and that includes airlines such as Delta, Air France and KLM, all partners of the Brazilian company. Gol’s plan is to increase the share of its revenue generated by international travelers. A deal that is almost already authorizes Gol to use the SkyTeam brand and the SkyPriority system. Gol also wants to explore existing partnerships, such as with Air France-KLM, with which it has shared a hub in Fortaleza since September. “We now have a structure that allows us to increase our sales by 15% to 20%,” Gol CEO Paulo Kakinoff said. In turn, Air France-KLM will use Gol, in which it holds 1.5% of the capital, to increase passenger traffic between Europe and South America.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 10, 2017
São Paulo mayor wants to use traffic tickets to back bonds

The government of São Paulo wants to issue up to R$400 million in bonds backed by an unusual asset: the flow of traffic fines in the city. Last year, the city received R$1.5 billion from traffic tickets, and that is expected to remain stable in 2017. The money raised would have to be used in traffic-related activities, as stipulated by the National Traffic Council (Contran), such as building bus corridors. About R$100 million of annual revenue from tickets would be paid out to investors. Several efforts by previous administrations to sell bonds tied to assets such as contracts with sanitation company Sabesp, and city debt repayment programs, never left the drawing board.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 09, 2017
Oi removes controversial proposal from new recovery plan

One of the issues causing recent disagreement between the management and the board of Oi — the proposal to pay creditors willing to participate in the capital increase planned by the telco even before the money is injected into the company — was eliminated from the latest version of the judicial recovery plan approved on Thursday, two sources told Valor. Oi did not comment on the matter nor did it disclose details about the approved plan, which is expected to be submitted to the court October 11.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 09, 2017
Government may address natural gas dispute in Eletrobras MP
The government is considering including in the provisional measure (MP) addressing the privatization of Eletrobras a solution to the impasse related to the state-controlled power company’s multibillion-real expenses from the purchase of natural gas, according to two sources with knowledge of the matter. The government wants to create conditions for the privatization of Amazonas Distribuidora de Energia and for pulverzing shareholder control of Eletrobras. According to an Aneel report, Eletrobras subsidiary Amazonas Distribuidora de Energia must reimburse R$3 billion to the Fuel Consumption Account (CCC), alleging that it was responsible for ship-or-pay and take-or-pay contracts, a view that Eletrobras, the Ministry of Energy and the court disagree with. Eletrobras says it is owed R$2 billion from the CCC.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 09, 2017
Refis performance generating debate over what to do with funds

With the revenue outlook from the Refis debt-repayment program coming in higher than expected and with strong oil and energy auctions bringing in better-than-expected inflows, the government is already arguing over what to do with that extra money: pay for more government programs or post a much lower primary deficit than the R$159 billion aimed for. Refis is expected to bring in at least R$6.6 billion.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 08, 2017
Social programs face steep cuts amid budget crunch

Once used as a showcase in election campaigns, social programs like Light for All, Program for Food Acquisition and My House, My Life are practically disappearing amid the fiscal restraint. Disbursements for housing program My House, My Life, which totaled R$20.7 billion in 2015, fell to R$7.9 billion in 2016 and amounted to only R$1.8 billion from January to August, according to a Valor survey based on government and Congress data. The Ministry of Planning’s deputy executive secretary, Rodrigo Cota, argues that “it is not correct” to say that the government is reducing social outlay: “What is happening is that spending on mandatory social policies is advancing and taking the space of discretionary policies in general.”
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 08, 2017
Sale of CGG terminal in Itaqui in last stretch

Six months after controlling shareholders decided to sell CGG Trading’s port terminal in Itaqui, in the northern Brazilian state of Maranhão, Valor has learned that there are few candidates lining up to buy the asset a month before the deadline for bids. One possible buyer, rival port operator VLI, could face “resistance” from other port partners due to past squabbles between the neighbors at the Maranhão facility. The port is being sold to shore up the finances at CGG, owned by the Cantagalo group – which is in turn controlled by Josué Gomes da Silva’s Coteminas – after being offered as a guarantee to banks during debt restructuring. It has a “fair value” on CGG earnings reports of $161.3 million, but analysts say excess capacity at the port and limited investment availability right now means the deal, expected to close in 2018, is unlikely to raise that much.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 07, 2017
Eletrobras and Eletropaulo try to end 29-year court battle

Investors were encouraged on Thursday by the prospect that Eletropaulo will settle this year a legal dispute with government-run power holding company Eletrobras that has dragged on for 29 years. The two companies intend to suspend the lawsuit for 60 days, at which time they will try to negotiate an agreement to end the litigation. The battle between the two power companies stems from a loan extended by federally controlled Eletrobras to then state-owned Eletropaulo in 1986. For the analysts who spoke with Valor, the dispute is especially negative for Eletropaulo, as experts understand that this company is the one that is liable. On June 30, the power distributor estimated that the adjusted amount would reach R$2 billion.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 07, 2017
Ouro Preto seeks investors ahead of pre-salt oil auction

Ouro Preto, the only closely held Brazilian company that is eligible for the next round of pre-salt oil auctions, is seeking investors who want direct exposure to the pre-salt layer to help bolster the bare-bones company’s chances in the deepwater fields. “We want to be an option for those who want to invest in the pre-salt alongside a Brazilian company with technical qualifications and experience,” chief executive Rodolfo Landim says. Excitement is growing about the Oct. 27 auction now that Petrobras doesn’t have to participate in all pre-salt exploration, says the executive, who created Ouro Preto in 2010 along with billionaire partner Julio Bozano.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 07, 2017
Olympic Committee head Nuzman arrested on corruption charges

Brazilian Olympic Committee President Carlos Arthur Nuzman, arrested Thursday during the second phase of Operation Unfair Play, is suspected of having embezzled funds from the organization and having engaged in buying of votes to ensure that Rio de Janeiro hosted the 2016 Olympics. Courts ordered R$1 billion in assets frozen, including sixteen 1-kg bars of gold Mr. Nuzman kept in Swiss accounts. The committee president allegedly worked with Sergio Cabral, the jailed former governor of Rio, to steer contracts to friends in exchange for bribes, and saw his personal wealth grow more than five-fold in a decade.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 06, 2017
Center of power shifting to Asia, FT’s Wolf says

The West no longer exists as an alliance, and the world is seeing a historic eastward shift of power to Asia, with conflict between the US and China at some point seeming inevitable, Financial Times economic columnist Martin Wolf said during the Global Citizen Forum. Brazil may see a favorable foreign context in 2018 and leave behind for good the crisis it has slogged through in the past four years. But there will be serious foreign risks added to the domestic risk of Brazil electing a populist president, which for Mr. Wolf represents a big mistake.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 06, 2017
Piketty defends a more radical democracy

French economist Thomas Piketty, the herald of inequality, says that income won’t be better distributed until there is a rebalancing of powers, and that the only way out for the European Union is through radical democracy. In an interview with Valor, the author of “Capital in the 21st Century” says that wealthy countries have for more than a century adopted “a policy of progressive taxation, ignorance of which has hampered Brazil’s development.”
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 05, 2017
Fishing industry secretariat changes hands again

The Ministry of Development’s secretariat in charge of the fishing industry is again changing hands in the midst of a scenario marked by legal uncertainty, lack of funds, irregular monitoring, and the productive sector’s widespread dissatisfaction with government policies for the sector. This time, the secretariat will migrate to the Presidency of the Republic. The proposal is included in provisional measure 782, which is expected to pass in the Senate this Tuesday, and then be signed by the president. It will be the third move since the extinction of the Ministry of Fishing and Aquaculture and its transformation into a secretariat under the Ministry of Agriculture in 2015.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 05, 2017
Funcef decides to sell Eldorado stake

Funcef, Caixa Econômica Federal employees’ pension fund, said Wednesday it will exercise tag-along rights to sell its indirect stake in Eldorado Brasil, the eucalyptus pulp producer controlled by holding company J&F Investimentos. The pension fund is a shareholder of private-equity fund FIP Florestal, which holds a 34.45% stake in the pulp producer, whose control will be transferred to Paper Excellence. Through FIP Florestal, Funcef has an indirect stake of 8.53% in Eldorado, the same slice held by Petros, the pension fund of Petrobras employees. As Eldorado was valued at R$15 billion, each pension fund may get R$640 million for their stake, after paying R$275 million for it in 2009.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 05, 2017
IMF recommends Brazil adopt “credible” medium-term debt path

The International Monetary Fund recommends that Brazil move ahead with its structural reform agenda, reviewing its mandatory expenditure system and indexation practices, and adopting a “credible” medium-term debt path to ensure that the public spending ceiling works in the next years. These are some of the conclusions from the FMI’s technical assistance mission, which visited Brazil in March at the government’s request to diagnose the New Fiscal Regime, which includes a constitutional amendment that freezes expenses in real terms, and tp propose measures to ensure its proper functioning. “Come 2020, though, due to the expected trajectory of mandatory expenditures, it will be difficult for the authorities to comply with the expenditure rule without some additional structural adjustments,” according to the report, “Supporting Implementation of the Expenditure Rule Through Public Financial Management Reforms.”
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 04, 2017
Carf rules on multi-billion real Santander case

Brazil’s tax-appeals court on Wednesday resumed hearings on its R$9 billion case against Santander, which involves alleged gains from the bank’s 2009 purchase of ABN Amro. Government tax authorities say Santander owes capital gains taxes from when it bought ABN Amro shares, but Santander says it had no gains. As of now, the court is split one-to-one, with six more members still to vote.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 04, 2017
INPI studies program to reduce patent application backlog

A simplified patent-granting program to substantially reduce the backlog of 230,000 applications could be implemented starting next year, said Luiz Otávio Pimentel, president of the National Institute of Industrial Property (INPI). According to him, the mechanism depends on the conclusion of a study carried out by the Office of the Chief of Staff. But it will also be necessary to solve a previous problem, which is the scanning of a huge number of patent applications in the country, which Mr. Pimentel said has already begun. “The number of new patent applications per year is 30,000, and our scanning capacity is close to that, so we are able to meet current demand but not meet the backlog.”
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 04, 2017
Enforce pays R$211m for BVA bad debts in auction

Enforce, BTG Pactual’s debt-recovery company, paid R$211 million for BVA’s bad debts auctioned on Wednesday. The assets total about R$2.2 billion in face value. BTG’s bid represents a 14% premium over the minimum price of R$184.6 million. After selling Recovery to Itaú Unibanco in 2015, BTG began rebuilding its debt-recovery business with the creation of Enforce last year. With the purchase of BVA’s credits, Enforce now holds a portfolio with a face value of R$33 billion, and is getting ready to go back to the market in the coming months. Under BTG’s agreement with Itaú, Enforce can only operate again in the segment after the end of this year.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 03, 2017
Brazil courts rule in favor of outsourcing auxiliary jobs

Brazilian courts ruled in favor of airlines that outsource duties such as check-in and ticket sales operations, one of the first tests of new outsourcing laws that is happening before the new laws even go into full effect. Workers had questioned whether ticketing and check-in didn’t constitute core company functions, thereby making them unacceptable as targets of outsourcing, but the judge deemed these jobs to be eligible for outsourcing, especially after the new outsourcing law included auxiliary roles.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 03, 2017
Brazil pays lowest premium on 10-year bonds since 2014

Brazil’s dollar denominated debt issue paid the smallest spread to US bonds since Brazil lost its investment grade rating two years ago, reflecting more positive views about the country. The 10-year bond issue raised $3 billion, and with a spread of 235 basis points more than US Treasuries, with the sale by the Brazilian government helped by reforms at home as well as liquidity abroad – a window of opportunity which may be closing.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 03, 2017
PDG proposes that creditors with real guarantees finance liabilities

PDG’s new judicial recovery plan proposes that creditors with real guarantees finance the payment of other creditors, such as unsecured creditors, labor debts, and micro- and small businesses. The real estate developer, which filed for judicial recovery in February, says in filings that it needs the backing of lenders with real guarantees to meet its financial obligations in the next 12 months. In June, PDG had already presented a recovery plan to the court, but failed to get creditors’ approval. According to the document, the developer plans to raise new funds through incentives for those who inject more money into the company. This amount will be excluded from the judicial recovery plan and will have preference in payment.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 02, 2017
Agriculture Census starts with smaller budget

After successive delays due to budget cuts in recent years, the Brazilian Institute of Geography and Statistics (IBGE) began on Monday gathering information for the country’s agriculture census. Over the next five months, 19,000 census takers will go to the field and visit about 5.3 million businesses with questionnaires on production, employee profile, irrigation and pesticide use, among other topics. Initially budgeted at R$1.6 billion to be executed over three years, the 2017 Agriculture Census is smaller than the one targeted by the IBGE. The institute had to resize the census to fit it into the budget approved by the government, which foresees R$505 million for 2017 and another R$280 million in the coming year.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 02, 2017
Former Eletrobras Chairman says privatization can’t focus on money

Former chairman of the board of Eletrobras, José Luiz Alquéres, criticized the privatization model under study for the state-owned electric utility, saying the process should focus on the company’s future as part of a sustainable and modern electric system. “Privatization can’t be seen as a way of scrounging up some change for the Treasury, but rather as a way to build an electric system fit for the 21st century. Sometimes we only see an ocean of ignoramuses and lobbyists, to say nothing of speculators, determining the rules.”
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 01, 2017
Brazil could more than double number of broadband subscribers

Demand for broadband internet in Brazil could go as high as a further 50.7 million homes, especially in the North and Northeast regions, according to a new survey by the Institute for Applied Economic Research (IPEA). Forty million homes currently have broadband either from landlines or wireless providers. IPEA also found that 2,325 municipalities still lack optic fiber, 58% of them in the North and Northeast. The study aims to gauge the reach of two measures: the conversion of regulatory fines into investment commitments and reforming the industry’s framework.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 01, 2017
Government vows to simplify trade regulations

Officials are preparing an overhaul of 143 rules among laws, decrees, ordinances, and resolutions affecting foreign trade. The Ministry of Industry, Foreign Trade, and Services (MDIC) has identified the areas needing modernization after surveying 27 official bodies involved in authorizing exports or imports. The ministry plans to hold 60 days of public hearings starting in October when stakeholders can make suggestions to reform at least ten laws, 13 presidential decrees, and 120 normative rules. The changes would start to be implemented between 2018 and 2019.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 01, 2017
Treasury transfers to federal banks were illegal, says TCU report

Experts from the Federal Court of Accounts concluded last week an investigation started in May 2015 into Treasury loans to state-owned banks, through direct issuance of government bonds. The confidential report found irregularities that violate the Law of Fiscal Responsibility. TCU Minister Aroldo Cedraz de Oliveira, the rapporteur of the case at the spending watchdog, received the report on Friday and will issue an opinion before the entire court votes on the issue.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

NEWSLETTER October November 2017 pag.02

October 31, 2017
Farmer insurance fund’s budget slashed by more than 50%

With coffers still empty following the recent economic downturn, the government decided to slash even further the fund used to subsidize insurance policies taken on by farmers, to R$260 million from a previously announced amount of R$550 million – which was already seen as too slight when the Agriculture Minister disclosed the sum in June. Vitor Ozaki, head of the Rural Risk Management department at the Ministry, said that this budget cut could lead to major setbacks. That would especially be true if extreme climate conditions next year lead to crop losses, says Pedro Loyola, economist at the Paraná Federation of Agriculture.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 31, 2017
Brazil’s worst recession on record ended in 2016, committee says

Based on the positive growth figures for various sectors of Brazil’s economy, the country’s worst recession on record – which led to a retraction of 8.6% during the 11 quarters of the economic contraction — officially ended in late 2016, the Committee for the Dating of Economic Cycles (Codace), a group at Fundação Getulio Vargas, said following a Friday meeting. Despite weak growth at the start of this year, which led to some uncertainty about the end of the economic downturn, current signals indicate that growth is returning, economist Paulo Picchetti says. The depletion of government funds contributed to the slow recovery, with previous attempts to staunch the 2008 crisis creating serious imbalances, according to the economist.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 31, 2017
Grupo Pão de Açúcar to spend R$45m in supermarket renovation

Grupo Pão de Açúcar (GPA) will start renovating some of its supermarkets already this year. After hypermarkets, supermarkets are gaining greater relevance among large retailers in the country. GPA is also adopting some measures to improve results after supermarket sales fell 1.2% in the January-September period. Fifty Pão de Açúcar supermarkets are due for renovation this year, with total investments of R$45 million. “For 2018, I will likely request at least 50 more renovations, but this has not been decided yet,” says GPA director Marcelo Bazzali. The chain has 185 stores in the country.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 31, 2017
Power distributors request R$1bn from reserve energy account

One week after approving changes to the methodology and values of rate-flag levels, the board of the National Electric Energy Agency (Aneel) will analyze, in a meeting scheduled for this Tuesday, a new request presented by power distributors. The proposal includes the release of nearly R$1 billion from the Reserve Energy Account (Coner) and the postponement, from the beginning to the end of the month, of the monthly settlement in the short-term market. Should Aneel accept the distributors’ request, the deposit of companies’ financial guarantees related to September’s settlement of short-term market operations, scheduled for this week, would be carried out by late November. The Brazilian Association of Electric Energy Distributors (Abradee) pointed out that “the increase in the hydrological-risk costs could result in a R$6 billion deficit in the ‘flag account’ through December this year,” preventing the distribution segment from meeting its obligations in the short-term market.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 30, 2017
Heat map shows moderate improvement in Brazil economy

A heat map of the Brazilian economy shows that activity is recovering, albeit at a moderate pace, according to a study by consultancy Tendências Consultoria Integrada. About a quarter of indicators provided a “hot” reading, while slightly more than a quarter were deemed “cool” and 47% rated “neutral.” According to Alessandra Ribeiro, who coordinates the macroeconomics and politics area at the consultancy, improving employment figures, low inflation, and falling rates should sustain the recovery. She expects Brazil’s GDP to grow 0.7% this year and 2.8% in 2018.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 30, 2017
JBS says committee decision led to dollar hedge ahead of audio leak

JBS will try to convince securities regulator CVM that public knowledge about market factors showing that the dollar would strengthen is what led the meatpacker to set up a $2.8 billion currency play earlier this year – and not privileged information linked to the leaking of conversations between JBS controlling shareholder Joesley Batista and Brazil President Michel Temer that sent the Brazilian currency tumbling. According to US consultancy Nera, which analyzed the trades using company information, after one year out of the currency hedge market, JBS decided on April 25 to return to the market, and began mounting its position on May 5, less than two weeks before Mr. Batista came forward with the audio recordings. JBS laywer Walfrido Warde says discussions began all the way back in February to hedge against widely expected dollar gains, and were carried out without any knowledge that Mr. Batista’s recording would become public on May 17.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 30, 2017
Ricardo Eletro reaches accord with creditors on R$1.5 bn bond sale

Máquina de Vendas, which controls home goods chain Ricardo Eletro, came to an agreement with creditors whereby a new holding company controlled by two partners will take on about R$1.5 billion of company debt by selling bonds in that amount to banks Bradesco, Itaú, and Santander. Following the sale of the bonds, which come due in 2024, the three banks will end up controlling about 60% of the retailer. The new holding company, MV Participações SA, will help Máquina de Vendas deleverage — after taking on massive debt to buy rivals right when a recession was undercutting sales – and possibly prepare it for a sale, one source said.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 29, 2017
DL shifts strategy from tablets to internet of things

Brazilian electronics manufacturer DL, whose sales are focused on tablets in the retail market, is expanding in the corporate segment. The initiative is part of the company’s strategy to diversify its revenue amid the shrinking tablet segment over the past three years — sales have dropped to 3.76 million units from 9 million, according to research firm IDC. Paulo Xu, DL’s founder and president, says the focus will be on equipment for the so-called internet of things (IoT). The initial investment in the new area totaled R$2.5 million, including market research, acquisition of test equipment and approval of products and personnel.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 29, 2017
GP Investments bets on Silicon Valley startups

Known for investments in large companies, GP Investments has started betting on Silicon Valley firms at an embryonic stage. Allocations are made through venture-capital asset manager Expanding Capital, founded in early 2016. Of the $40 million raised by Expanding with Brazilian investors, GP is the largest individual investor. Since May last year, Expanding Capital has invested $10 million in six startups, such as mParticle (data company), TuneIn (radio and audio), and Coinbase (digital currency platform), according to CrunchBase, which gathers data on the venture capital industry.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 29, 2017
Evangelical congregations driving candidacy of Bolsonaro

The president of the Brazilian Council of Pastors, Robson Rodovalho, says the candidacy of Deputy Jair Bolsonaro (Social Christian Party, PSC, of Rio de Janeiro) could turn into a “torrent that carries off everything in its path,” with support growing among members of evangelical congregations who see him as an alternative to the decay in Brazilian institutions. For sociologist Ricardo Mariano at the University of São Paulo, the weakening of the Workers’ Party (PT), which during the presidency of Luiz Inácio Lula da Silva attracted lower-income voters, has led to a trend of more people looking to populist candidates like Mr. Bolsonaro.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 28, 2017
SouthRock in talks to purchase Starbucks operations in Brazil

São Paulo-based private-equity firm SouthRock Capital is in talks with Starbucks to acquire the coffeehouse chain’s operations in Brazil. Starbucks Corporation has owned 100% of the business since 2010. According to the memorandum of understanding signed between the parties, SouthRock may become a master franchisee of the brand and owner of chain’s 105 units, with sales of nearly R$200 million last year. Contacted by Valor, Starbucks and SouthRock declined to comment. According to a source familiar with the talks, the plan initially discussed includes the opening of about 60 new stores in the country over the next three years, reaching 170 units by 2020.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 28, 2017
Fashion retailer Restoque may raise R$800m in stock offering

The share offering that fashion retailer Restoque — owner of Le Lis Blanc, Dudalina, Rosa Chá, Bo.bô. and John John brands — has signaled to the market could raise R$800 million and mark the exit of private-equity firms Advent International and Warburg Pincus from the company’s capital structure. The share sale would help improve debt ratios at Restoque, which has been closing stores and factories, reduced its administrative staff, and seen a number of executives come and go. No date has been set for the share offering.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 28, 2017
Government already admits partial pension reform

Although officials are still publicly pushing for approval of the full proposal, behind the scenes the government is already admitting that it may have to split pension reform into different bills if Congress doesn’t vote on the law by the end of the year. President Michel Temer selected three critical points to push forward that he considers “75% of the reform”: a minimum age of retirement of 65 for men and 62 for women, equal rules for public and private-sector workers, and rules for the transition to the new system. If resistance among lawmakers doesn’t wane by late November, aides close to the president agree that the discussion needs to evolve on at least those three issues.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 27, 2017
Supreme Court justices exchange accusations

Justices Luís Roberto Barroso and Gilmar Mendes traded harsh words on Thursday during a Federal Supreme Court (STF) hearing. In the exchange of reciprocal attacks, Mr. Barroso accused his colleague of leniency toward white-collar crimes, and “changing jurisprudence according to the defendant.” In return, Mr. Mendes said he was not “an attorney for international thugs”, alluding to the fact that Mr. Barroso defended Italian terrorist Cesare Battisti before joining the STF.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 27, 2017
Vale still faces two major challenges after migrating to Novo Mercado

After securing its migration to Novo Mercado — B3’s strictest corporate governance segment — scheduled for December 22, mining company Vale, in addition to continuing to pursue operational improvements and debt reduction, will face two major challenges: finding solutions to its money-losing nickel operation in New Caledonia, and resuming operations at Samarco, in Mariana, Minas Gerais, which will require a “complicated” environmental licensing process following Brazil’s worst-ever environmental disaster at the site.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 27, 2017
Federal decree may release up to R$4.6bn for environmental projects

The federal decree that allows environmental fines to be converted into investment may free up as much as R$4.6 billion for investment in priority environmental projects during the initial stage of implementation. That amount surpasses the R$3.9 billion that was disbursed during the last ten years by the Amazon Fund, the largest fund focused on protecting the region. The Environment Ministry’s budget for environmental projects, including agencies such as Ibama, the Chico Mendes Institute, the National Water Agency and the Brazilian Forest Service, is just R$600 million. “It’s a historic breakthrough,” says Ibama president Suely Araújo. Historically, the average revenue from Ibama fines accounted for just 5% of that total.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 26, 2017
No agreement reached at Oi board meeting with creditors

Oi’s board meeting, which discussed the terms of its Plan Support Agreement (PSA) with creditors, ended with no consensus on Wednesday, three sources told Valor. Oi is trying to obtain support from the group of creditors known as G6, which would be willing to join in on a future capitalization of the carrier. An initial version of the PSA was disclosed by the company along with the judicial recovery plan. However, the document presented for discussion at Wednesday’s meeting brought radical changes from the first version. Among the PSA’s controversial points is that the G6 must be compensated even in the event of an intervention by the National Telecommunications Agency (Anatel), one source explained. Because of the changes in the original document, it was agreed that the PSA will be resubmitted to the board, likely next Friday, another source said. Contacted by Valor, Oi declined to comment.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 26, 2017
Eletropaulo and 25 carriers to invest R$300m in undergrounding

The tangle of electrical wires, telecommunications cables, and utility poles have been slowly disappearing from the skyline of large cities around the world. In Brazil, Eletropaulo and 25 carriers with networks in downtown São Paulo will spend at least R$300 million in a project to bury cables, known in industry parlance as undergrounding. The works are already being carried out and slated to end in 2019. These companies signed an agreement with the São Paulo city government to try to improve the landscape in part of the metropolis. A study by Eletropaulo shows that Brazil has a low percentage of cables buried, despite having started the process in the 1940’s with utility Light. Since then, even with the inclusion of other companies, the rate reached only 11% in Rio de Janeiro, 7% in São Paulo and 2% in Belo Horizonte.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 26, 2017
Temer friend accused of money laundering in foreign exchange contracts

The Federal Police is investigating foreign exchange contracts worth $1.2 million and €1.4 million linked to AF Consult, implicated in Operation Car Wash and located at an address linked to Colonel João Baptista Lima Filho, a friend of President Michel Temer for more than 30 years. Mr. Lima Filho is accused of receiving R$1 million that were allegedly meant for the president, according to the Office of the Prosecutor General (PGR). Mr. Temer’s defense has denied the allegations. Accused of money laundering, AF Consult was hired by state-run nuclear power company Eletronuclear. Defense attorneys for João Baptista Lima Filho said they would not comment on the matter.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 25, 2017
Pressured by PR party, Temer removes Congonhas from airport auctions

Pressured by the Party of the Republic (PR), which has controlled the Transportation Ministry for years, Brazil removed the Congonhas airport in São Paulo from the list of airports to be auctioned off. Congonhas, Brazil’s busiest domestic airport, helps finance state-run Infraero’s money-losing terminals and its sale would weaken Infraero even further, minister Mauricio Quintela (of the PR) protested. But political motivations spoke louder: the PR has 39 seats in the lower house – which was set to vote on whether criminal allegations against the president should move forward – and Mr. Temer wanted to avoid conflicts with party leaders.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 25, 2017
Brazil cuts Selic to 7.5%, opens door for additional cuts in 2018

Brazil’s Monetary Policy Committee (Copom) cut the benchmark Selic rate by 75 basis points to 7.5% and signaled that it will likely make a 50 bps cut at its next meeting, the last one for this year. But a change in the statement that accompanied its decision raised doubts about what would follow in 2018. The Copom removed from its statement any mention that it was nearing the end of the easing cycle, and instead said once more – as it did in September, when it cut the Selic by 100 bps – that it would “moderate” its reduction of the rate, while adding that future decisions would depend on the economy’s continued recovery and on whether inflation falls even further than expected.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 24, 2017
Government readies restructuring plan for Oi

The draft of a restructuring plan for Oi, prepared by the government, will be ready next Friday for a final discussion on Monday by its task force. The Attorney-General of the Union, Grace Mendonça, who is heading the task force, will meet with the company’s management before the final meeting and the plan will then be presented to creditors on November 10. Bondholders will have to contribute R$3 billion to a capitalization but will be allowed to swap debts for shares while government banks will not participate in the plan in any way.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 24, 2017
Brazil to introduce governance rules for public expenditures

Brazil plans to create governance rules to improve the efficiency of public spending and establish targets, part of its effort to abide by new caps on spending and as part of its bid to become a member of the Organization for Economic Cooperation and Development (OECD). Not only is the government reviewing existing programs – it cut off Bolsa Familia disbursement funds to 490,000 non-eligible recipients and ceased payment on R$10 billion in improper social security medical disability payments – but also wants to include targets and governance practices in all future programs in order to recoup confidence in government.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 24, 2017
Political meddling squeezed Caixa capital ratios

Caixa Econômica Federal’s cash crunch to meet Basel 3 capital requirements results from policies adopted by the Luiz Inácio Lula da Silva and Dilma Rousseff administrations, including the so-called “creative accounting” to generate primary surplus from financial transactions and a steep increase in its credit portfolio as a counter-cyclical tool against the 2008 crisis. Since 2008, Caixa’s loan portfolio has increased nine-fold to R$715.9 billion by late June, while the overall financial system’s loan balance rose 151.7%, as the government used Caixa and other state-owned banks to lower global spreads in the financial system – which also hurt the bank’s earnings.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

Montblanc invests online and seeks better margins

Luxury pen-maker Montblanc opened its own online store last week after more than a year in the works, seeking to take advantage of Brazil demand while reducing costs associated with brick-and-mortar stores in the gigantic country. Montblanc has nine stores in the country, five franchises, and also sells products via other retailers. Online operations, meanwhile, had previously been through the platform operated by jewelry store Vivara. But in its quest for better margins, Montblanc decided to operate its own site, and hopes that within one year it will get 10% of sales from the digital platform, which will offer the company’s full portfolio of products.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 23, 2017
Heráclito Fortes, the man putting out political fires

During President Michel Temer’s most difficult week in his 17 months in power, Federal Deputy Heráclito Fortes (Brazilian Socialist Party, PSB, of Piauí) has been responsible for mediating a conflict between Mr. Temer, his longtime friend, and Chamber of Deputies President Rodrigo Maia, as the lower house prepares to vote on a second round of charges against the president. Dubbed “Soft Mouth” in Odebrecht spreadsheets, Mr. Fortes spent all week trying to reconcile differences between the two men, and succeeded in reestablishing communication after a 20-day standoff.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 23, 2017
Brazil to redefine slavery-like work conditions, Temer says

The federal government continues to refuse to fully revoke a decree that weakened efforts to eliminate slavery-like conditions in Brazil – by demanding explicit proof of restrictions on worker freedom to come and go as they please – and instead will revisit the issue and try to more clearly define what constitutes the crime of slavery. During a Saturday lunch, President Michel Temer told that the Labor Minister Ronaldo Nogueira is talking with Prosecutor General Raquel Dodge to work out the language of future definitions of when someone can be accused of creating slavery-like work conditions.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 23, 2017
Fintech Bart Digital gets R$2.2m injection to expand in barter market

SP Ventures, an asset manager focused on innovative projects, has invested R$2.2 million in Bart Digital, which provides solutions for the Brazilian agribusiness market. The startup, created in April 2016 by four entrepreneurs, applies blockchain technology to the barter trade, where there is an exchange of grains for inputs between producers and agro-industries. Founding partner Mariana Bonora says the system simplifies and speeds up the approval of transactions, integrating the parties involved. The company plans to start selling the solution in March 2018.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 22, 2017
Lab São Marcos seeks acquisitions to lift revenue by 300% in 4 years

Laboratório São Marcos, Belo Horizonte’s second largest medical diagnostic chain, plans to grow through acquisitions and increase its revenues by more than 300% within four years. Since the start of this year, the company has bought two laboratories in Minas Gerais and one in São Paulo. The transactions cost about R$40 million, financed by loans with commercial banks and cash. São Marcos has expanded rapidly in recent years, with gross revenue rising from R$5 million in 2005 to R$103 million in 2016, and is expected to total R$160 million this year. The company’s target is to reach gross revenue of R$700 million by 2021, says Ricardo Dupin, executive director of São Marcos.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 22, 2017
Rede D’Or São Luiz in talks to buy 60% of São Rafael Hospital

Rede D’Or São Luiz is in final talks for the acquisition of approximately 60% of São Rafael Hospital, located in Salvador. The deal is valued between R$420 million and R$480 million. According to sources, the entire São Rafael Hospital is valued at R$700 million, but it could reach R$800 million depending on its financial performance. São Rafael, which has 400 beds and 12 operating rooms, is expected to post revenues of R$600 million this year. The investment would mark the debut of Rede D’Or, the country’s largest hospital chain, in the Bahia market. Until now, Rede D’Or’s presence in the Northeast was restricted to the state of Pernambuco.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 22, 2017
Coutinho, Casino and Minas governor accused of bribery scheme

The Federal Police charged eight people, including former Brazilian Development Bank (BNDES) president Luciano Coutinho, and is awaiting authorization from the Superior Court of Justice (STJ) to charge Minas Gerais Governor Fernando Pimentel (Workers’ Party, PT) with accepting a R$2.8 million bribe from Casino. The French retail group was accused of trying to block BNDES financing for a proposed merger between Carrefour and Grupo Pão de Açúcar. Mr. Pimentel would have accepted the bribe in 2011 while holding office as minister of Development, Industry, and Commerce and, according to investigators, would have told Mr. Coutinho to add a rule blocking the development lender from financing retail chains. In a note, Casino said it was “surprised” by the accusations and denied paying any bribes. Mr. Coutinho rejected the allegations, saying through his press representatives that the clause at stake was suggested by the collegiate body of BNDES.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 21, 2017
Oi top creditors come together to postpone general meeting

The top creditors of telco Oi have jointly requested to Judge Fernando Viana, of Rio de Janeiro’s 7th Corporate Court, to postpone from November 23 to November 27 the general meeting related to the company’s judicial reorganization, with the goal of developing a plan that has a majority endorsement. Together, creditors seeking to postpone the meeting are owed R$30 billion. Oi’s total debt reaches R$74 billion, considering the R$20 billion in liabilities linked to regulator Anatel. The government needs more time to build a comprehensive solution to the company’s financial situation. By the end of November, it’s possible that American fund TPG, together with China Telecom, advance on a proposal to buy a stake in Oi.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 21, 2017
Government faces difficulties on FGTS funding for Caixa

The government already faces difficulties in obtaining reinforcement of capital for Caixa Econômica Federal with funds from the Workers’ Severance Fund (FGTS). Representatives of the fund have raised doubts about the legality of the measure. The conclusion is that the purpose of the FGTS, which is meant to finance the housing sector, basic sanitation and urban transportation, is being corrupted. According to a government source, there is concern that the move will be questioned by the Federal Court of Accounts (TCU). The operation is intended to work as a loan with which the Caixa would issue perpetual bonds, that would be transferred to the FGTS, in exchange for R$10 billion in cash. Caixa would pay the FGTS annual interest corresponding to the Selic rate (currently 8.25% annually) plus 1.2%.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 20, 2017
Economists project record low interest rates for 2018

Among economists a consensus is forming that by 2018, an election year, the country will reach a record low level of interest rates, at an annual 7.25%. Of 33 economists heard by Valor, one foresees an interest rate of as low as 6.75% by the end of this year, while the remainder foresee a rate of 7.25% by the end of December. Of the group, 29 believe that interest rates will remain at this level, or will fall a little more by the end of 2018. Only four expect an increase in rates next year. The prospect of the maintenance of the base rate confirms the success of the Central Bank in the management of inflation expectations. In two years, the annual IPCA fell from 10.67% to a current 2.5%. In the last 12 months, a period in which Selic fell to 8.25% from 14%, the real interes rate went to 2.96% from 7.13%.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 20, 2017
Kia Motors invests R$165m to expand in Brazil and create 1,300 jobs

Kia Motors do Brasil announced on Thursday a plan to invest R$165 million to expand operations and the creation of 1,300 jobs in the country, or 48% of today’s total. The announcement comes after the end of Inovar-Auto, a federal government program that in the last five years set an additional tax for vehicles produced outside of Mercosur. In terms of investments, R$50 million will be allocated to new car dealers; R$45 million to advertising and marketing; R$30 million to equipment and R$5 million will be spent to stock spare parts for vehicles to be launched, as well as for staff training. Another R$35 million will be allocated to a technology center in Salto, São Paulo.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 19, 2017
Financial regulation reform heads to Senate

The Chamber of Deputies passed a bill that allows financial companies to sign leniency deals with the Central Bank and securities regulator CVM. The maximum securities fine rose to R$5million from R$500,000, while Central Bank fines could go as high as R$2 billion or 0.5% of some bank revenues. But the bill also allows whistleblowing companies to win immunity if they report crimes first. Insider trading gained a broader definition and tougher penalties on market agents entrusted with keeping the data confidential but who trade on it.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 19, 2017
Caixa Econômica Federal planning sale of R$10bn in perpetual bonds

To help Caixa Econômica Federal comply with Basel 3 capital requirements, which will come into effect in 2019, the government may authorize the bank to issue R$10 billion in perpetual bonds, which generally pay higher interest rates. Caixa would sell the R$10 billion in securities through the Workers Severance Fund (FGTS), which would, in turn, would keep the perpetual bonds that are issued. According to a source who spoke with Valor, the model, still under discussion, would be interesting both for Caixa, which could book the funds as Tier 1 capital (of better quality), and for the FGTS, which would have higher returns than the current ones.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 19, 2017
Neoenergia partners reach consensus for IPO

After reaching an agreement on the price set for Neoenergia, partners of the power company will resume the IPO on the stock exchange. Under the new consensus, the transaction may be launched with a floor between R$16 billion to R$17 billion. In early October, Neoenergia’s IPO was postponed after Banco do Brasil, Previ (pension fund of BB employees) and Iberdrola failed to reach consensus on the stock price for the sale. Now, Neoenergia will await the release of its third-quarter figures, scheduled for early November, to resume the transaction.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 18, 2017
Tax secretary vows to offset losses from PIS/Cofins ruling

Federal Revenue Secretary Jorge Rachid said Wednesday he will appeal the removal of the ICMS sales tax from the base of the calculation base of PIS/Cofins social contributions, which was ordered by a controversial Federal Supreme Court ruling. He said officials would have to offset the lost revenue with budget cuts or by creating a new tax if the STF ruling prevails.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 18, 2017
Brazilian pharmaceuticals double down on Canada

Biolab Farmacêutica is accelerating its internationalization project. The company Thursday will open its first research and development center outside of Brazil, in the province of Ontario, Canada, and plans to set up a drug factory there in the next two to three years. As a result of investments of 56 million Canadian dollars, the center will operate as a technological platform to advance the laboratory, the first 100% of national capital to install an R&D unit in another country. Biolab’s interest in Canada is not isolated. In an interview with Valor, Ontario’s commercial consul Todd Barrett said seven of Brazil’s largest pharmaceutical companies, including Biolab, are in talks with the local government for potential investments.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 18, 2017
Amazon looks to raise the bar in Brazilian electronics sales

Amazon Wednesday took its first large step in expanding since it entered the Brazilian market. Since mid-night, the American company began selling 44 items in 5 electronic product categories in its virtual “marketplace,” including TVs, cell phones, games and accessories that are all from highly competitive segments and large chain stores operating in the country. The sales are from stores hosted on the group’s site, which forms the “marketplace” concept. The new service launch has weighed heavily against other competitors in Brazil’s digital commerce segment and brought down shares of B2W, Magazine Luiza and Via Varejo. Amazon began operations in the country in 2012 selling books, and company officials expressed optimism about prospects for continued growth with the new offerings “Beginning with books we learned some things,” said Amazon Brazil General-Director Alexandre Szapiro. “In Brazil it seems the bar is low regarding how consumers are treated. This is what we are looking at in electronics.” In a recent report, BTG Pactual bank analysts estimated that Amazon’s sales in Brazil rose 65% in 2016 over the previous year, to R$200 million.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 18, 2017
Senate overturns Supreme Court ruling and brings back Aécio Neves

Brazil’s senate, by 44 votes to 26, decided to overturn the decision of the 1st Panel of the Federal Supreme Court and allow Senator Aécio Neves (Brazilian Social Democracy Party, PSDB, of Minas Gerais) to resume his activities. Mr. Neves needed the support of an absolute majority of the Senate (at least 41 votes) to retake his legislative role and be released from a nightly arrest. With support also from the Brazilian Democratic Movement Party (PMDB) and Progressive Party (PP), some of the largest in the Senate, and a broad negotiation led by other equally charged senators – such as Renan Calheiros (PMDB, of Alagoas) and government leader Romero Jucá (PMDB, of Roraima) –, Mr. Neves was able to suspend the precautionary measure that had kept him away from Congress since September 26. Government allies even brought lawmakers on medical leave to save the Senator’s term.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 17, 2017
Cade analyst warns of concentration in agricultural inputs segment

Patrícia Samensato, general coordinator of analysis and antitrust for the Council of Administration of Economic Defense (Cade), said on Tuesday that the agency has identified several cases of relevant market concentration in agricultural inputs and has been seeking to intervene to ensure competition in the segment. Ms. Samensato cited as a recent example the rejection of the purchase of Precision Planting by John Deere, which manufactures farm machinery. In case of the acquisition of Vale Fertilizantes by Mosaic, the Confederation of Agriculture and Livestock of Brazil (CNA) and deputies from the farm caucus raised concerns, during a hearing with Ms. Samensato held Tuesday, that the transaction leads to an increase in fertilizer prices in Brazil’s top agricultural regions, mainly in the Central-West.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 17, 2017
JBS suspends operations in 7 slaughterhouses in Mato Grosso do Sul

JBS will suspend operations at its seven cattle slaughterhouses in Mato Grosso do Sul as of Wednesday. The company claims legal uncertainty after having more than R$620 million frozen by a court decision at the request of the Parliamentary Inquiry Commission conducted by Mato Grosso do Sul’s Legislative Assembly, which investigates tax irregularities. In a statement, JBS said that activities in the state, which has the fourth largest cattle herd in the country, will be shutdown for an indefinite period of time. Meanwhile, the Securities and Exchange Commission of Brazil (CVM) shelved an investigation into potential wrongdoing for insider trading by Banco Original, another asset of J&F Investimentos, which controls JBS.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 17, 2017
Cade position hurts prospects for Itaú, XP deal

The decision of the Cade anti-trust court to declare the purchase of XP Investimentos by Itaú Unibanco as complex practically buries the possibility of unrestricted approval, according to information obtained by Valor. Of the 29 cases that have been declared complex by the court since the new anti-trust law took effect in 2012, only five were approved without restrictions. Itaú closed a deal for the purchase of XP in May this year for R$6.3 billion. If the deal is approved by regulators, the largest private Brazilian bank will hold 49.9% of XP’s capital and 30.1% of shares with voting rights. The bank’s stake in the brokerage could increase to 74.9% of total capital and 49.9% of common shares by 2022. In a decision published Monday, Cade requested more information on the case and opened the doors for the possible prolongation of the final timeling for making a decision on the operation. Sought for comment, Itaú and XP declined to make a statement.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 16, 2017
Latam Brasil to invest R$130m in Guarulhos maintenance center

Latam Brasil announced on Monday, in a meeting with President Michel Temer in Brasília, a R$130 million investment in São Paulo’s Guarulhos Airport to build a new maintenance center. The hangar will be used to carry out light inspection and maintenance of all Latam’s aircraft models. The investment will be made under the build-to-suit system, that is, a construction company, to be defined, will deliver the project to Latam in exchange for a long-term lease. More complex maintenance will continue being carried out at the center located in São Carlos, interior of São Paulo.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 16, 2017
Brazilian consumers becoming more politically aware of brands

The stance of brands on social and political issues is gaining increasing clout among Brazilian consumers when it comes to making a choice or even forfeiting purchases. According to media agency Edelman, 62% of consumers interviewed reported they care about a brand’s stance when it comes to picking products, from a global average of 57%. The number of people reporting product boycotts because of a company’s political position has risen 32%. Daniela Schmitz, managing VP of engagement at Edelman, believes the trend derives from today’s skepticism about the country’s institutions. “Companies can’t just focus on selling anymore. People are not accepting neutral companies,” she said. Entertainment and electronics had the smallest level of consumer calls for political awareness, while fashion and social media saw the most prominent calls.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 16, 2017
Itamaraty and Agriculture ministry clash over import quotas

A proposed 750,000-tonne quota for imported wheat is triggering a new clash between the Agriculture Ministry and Brazil’s Foreign Ministry, or Itamaraty, which is expected to reach the Foreign Trade Chamber (Camex). Agriculture Minister Blairo Maggi practically promised the quotas to US officials in return for opening the country’s market to Brazilian beef. Brazil also has a World Trade Organization commitment to set up the wheat quotas, which never materialized as Itamaraty officials refused to create them and even proposed to the US lowering the consolidated tariff to 37.9% from 55%. After Mr. Maggi forwarded the quota proposal to Camex, Itamaraty officials blocked it amid growing irritation with another unilateral decision by Mr. Maggi of restricting milk imports from Uruguay. The disagreements set the stage for a showdown at Camex’s next meeting on October 25.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

October 16, 2017
Brazil will nominate new BRICS Bank representative in two weeks

The Finance Ministry wants to pick a veteran private-sector banker with diplomatic skills but no political affiliation to replace economist Paulo Nogueira Batista Junior at a vice-president post at the New Development Bank, better known as the BRICS Bank. In Washington, Finance Minister Henrique Meirelles said he believes the nomination will be ready two weeks from now. Mr. Nogueira faced accusations of harassment and of violating the bank’s charter by commenting on domestic politics of a member country, in this case, Brazil. He was dismissed on Thursday after a unanimous decision from the bank’s five national partners: Brazil, Russia, India, China and South Africa.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

MURRAY ADVOGADOS NEWSLETTER October – November 2017 pag. 01

November 08, 2017
Higher pension dues for civil servants seen as legally fragile

The creation of progressive rates for pension contributions of federal workers, included in provisional measure (MP) 805, could be overruled in court according to experts. The government wants to set an 11% rate for those earning up to R$5,531.31 and a 14% rate for any income above that. But the Federal Supreme Court (STF) has ruled the measures unconstitutional in the past, considering that it requires direct changes in the law, said a source at the high court. Still, the source admitted that the precedent is from before 2011 and a new trial may change it in the government’s favor.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 08, 2017
Government postpones privatization of instant lottery

Officials have decided to privatize only next year Brazil’s scratch-off lottery, between February and March, said Mansueto Almeida, the Finance Ministry’s Economic Monitoring secretary. Officials were previously planning to auction Lotex still this year, possibly in December. Mr. Almeida added that the government is studying changes to the auction’s terms after potential bidders complained about some requirements, including the R$923 million upfront payment. According to the secretary, the sale had to be postponed after the Federal Court of Accounts (TCU) forwarded the case to its Rio de Janeiro branch for further analysis.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 08, 2017
Eletrobras sale may delay solution for billions in GSF losses

The government’s decision to propose the privatization of Eletrobras through a legislative bill may delay the solution of a problem that has been dragging on for the last two years: the so-called generation scaling factor (GSF) or the losses caused by insufficient generation from drought-stricken hydropower dams. The GSF solution was supposed to be included in an immediately binding provisional measure but now officials are seeking a separate legislative bill. Even if fast-tracked, the law would still take a back seat to selling Eletrobras, with a government official admitting it could end up freezing the short-term market and causing billions in losses for generators and distributors. GSF losses were estimated at R$3.7 billion in August.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 08, 2017
Oi faces R$40.6bn in potential compensation from legal battles

Target of more than 722,000 lawsuits and administrative proceedings, Oi faced a potential legal bill of R$40.62 billion by mid-2017, with 65% of this total involving tax issues. The data are included in a document filed by the telco with the Securities and Exchange Commission of Brazil (CVM) on Monday. As they are not liabilities, legal expenses are not considered in Oi’s judicial reorganization, which negotiates a R$64 billion debt. When contacted by Valor, Oi declined to comment. For cases whose ruling will be likely unfavorable, Oi made provisions totaling R$6.34 billion.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 07, 2017
Caixa focuses on low-income housing amid capital crunch

Given its core capital restrictions, Caixa Econômica Federal has decided to focus on mortgages for families earning up to R$4,000 a month and offered as part of housing program Minha Casa, Minha Vida. The state-owned lender believes the new focus will free enough capital so it can lend R$8.7 billion recently redirected from other mortgage lines financed by the Workers’ Severance Fund (FGTS). Since such loans still would demand more Tier 1 capital to comply with Basel 3 rules, Caixa’s housing vice president, Nelson Antonio de Souza, said the bank has been curbing riskier operations to offset the effects.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 07, 2017
Government lays out privatization procedures for state-owned ventures

The government has established divestment guidelines for semi-public companies, aimed at providing legal security to transactions from the likes of Petrobras and Eletrobras. According to Fernando Soares, Secretary of State-Owned Companies at the Planning Ministry, the guidelines were created in agreement with the Federal Court of Accounts (TCU), which suggested more transparent rules for Petrobras divestments facing legal challenges from unions.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 07, 2017
Petrobras to lower estimates for recoverable volume of oil and gas

Petrobras estimates the total recoverable volume of oil and natural gas in the pre-salt area included in the onerous transfer of rights contract is lower than what was released by Brazil’s oil industry regulator ANP last week, which indicated a reserve volume of 6.1 billion to 15 billion barrels of oil equivalent (boe), in addition to the 5 billion boe already contracted by the state-controlled company in 2010. In a statement released on Monday, Petrobras said that “based on the large volume of data it has acquired” over the past seven years, it has made its own estimates of surplus volumes. The company confirmed that there was a 5 billion boe surplus already acquired, and reinforced it’s a creditor in the review process of the onerous transfer of rights agreement with the federal government. Petrobras plans to release its estimates in about 30 days.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 06, 2017
Americanas studies opening up to 3,000 convenience stores

Department-store chain Lojas Americanas plants to open up to 3,000 smaller stores more focused on groceries, in a similar expansion strategy to that of Grupo Pão de Açúcar and Carrefour. The company has not detailed the deadline or the investment required, although it has been planning the expansion for some time and even expressed interest last year in acquiring a stake in BR Distribuidora, the Petrobras retail fuel arm. The “neighborhood” format being studied offers a variety of groceries as well as breakfast options and primary products like frozen foods, beer, wine, sandwiches and some items already sold at its traditional locations. The pilot project would open four stores in Rio de Janeiro, expandable to ten by the end of the year.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 06, 2017
Dorchester Collection picks São Paulo for first South America unit

Luxury hotel operator Dorchester Collection plans to open its first South American hotel in São Paulo. The group’s COO and general manager of Paris’s Hotel Plaza Athenée, François Delahaye, confirmed the São Paulo project, which he said was motivated by the city’s economic importance and significant potential clientele. Brazilians already represent 12% of Plaza Athenée guests, paying anywhere from €1,100 to €3,000 a night for a week-long average stay, longer than most American or English tourists.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 06, 2017
BNDES increases reimbursement deadline of infrastructure projects

The Brazilian Development Bank (BNDES) will allow the reimbursement of infrastructure investments as soon as the financing contract is signed. The bank’s board approved last week the new rule, which already will be in effect for December’s electricity auctions, infrastructure director Marilene Ramos told Valor. From January 2018, the new criteria also will be valid for other infrastructure projects. The bank hopes the change will bring forth more mature projects that can win approval more quickly. Electricity projects have been leading infrastructure demand at BNDES this year, officials say.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 06, 2017
PSDB faction advocates leftist turn

Amid the crisis faced by leftist parties since the collapse of the Dilma Rousseff government, a militant group of the Brazilian Social Democracy Party (PSDB) advocates ideas that are also dear to the Workers’ Party (PT). Contrary to privatizations and economic liberalism, favoring the taxation of large fortunes, capital controls and tax reform focused on social justice, the “PSDB Esquerda Pra Valer” (EPV) wing advocates the party’s turn to the left and rejects the presidential candidacy of São Paulo Mayor João Doria, but supports that of the governor of São Paulo, Geraldo Alckmin. “He is a progressive but discreet figure. His administration has a number of social policies, including for the LGBT community and other minorities. There are popular housing projects,” points out EPV coordinator Fernando Guimarães.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 05, 2017
New $125m plant mirrors economic recovery, WestRock Brasil CEO says

WestRock’s decision to build in Brazil its largest corrugated packaging plant in the world, with an estimated investment of $125 million, is a “clear” sign that the economy is really coming out of the crisis, Jairo Lorenzatto, CEO of WestRock Brasil, told Valor. “This movement adheres to the economic momentum and reinforces our commercial positioning,” added Mr. Lorenzatto, noting that the third quarter showed “a clearer situation of spending stability.” Considered an important barometer of the economy, Brazilian cardboard shipments show recovery in 2017, and are expected to rise 3.8% in 12 months after two years with declines of more than 2%, according to trade group ABPO.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 05, 2017
Odebrecht bets on American compliance chief to regain trust

American attorney Michael Munro faces one of the biggest challenges of his over 25-year career installing anti-corruption systems in companies. He has been the vice-president of compliance of Odebrecht Engenharia e Construção (OEC) since May 2016, and assures the company isn’t involved in wrongdoing anymore but admits the toughest part is actually convincing the public of that. According to him, the message is sticking and companies are ready to do business with OEC again. He argued that while bribery represented a significant portion of Odebrecht’s businesses it wasn’t ubiquitous. “We have large projects in the US. Without bribery. Unfortunately, sometimes people think Odebrecht won those contracts through bribery. No, Odebrecht won because it is a large construction company,” he said.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 05, 2017
Aneel must redo calculations on amount owed by Amazonas Energia

Judge Kassio Nunes Marques, of the Regional Federal Court of the 1st Region (TRF-1), ruled that the National Electric Energy Agency (Aneel) must redo calculations related to the Fossil Fuel Consumption Account (CCC) of Amazonas Energia, which had indicated that the Eletrobras subsidiary had to reimburse R$3 billion to the CCC, related to fuel expenses for power generation in the state. In practice, the judge wants Aneel to withdraw from calculations the costs related to the infrastructure built to transport natural gas in Amazonas, which he ruled cannot be charged to Amazonas Energia since it is an investment within a government energy policy. There is no date yet for Aneel to present the new figure to be reimbursed by Eletrobras or even paid to the state-run utility. Eletrobras says it is owed R$2 billion from the CCC.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 04, 2017
Oi board members accused of at least seven infractions by CVM

Oi board members are target of at least seven administrative proceedings with charges identified by the Securities and Exchange Commission of Brazil (CVM). Oi’s most influential shareholder, Nelson Tanure, is target of four of these proceedings, two of which have already been shelved, as previously reported by Valor. Two cases relate to the accountability of Blener Mayhew, an alternate member of Oi board appointed by Mr. Tanure for alleged violations committed as an executive of PetroRio. The first case was shelved in 2016, but a second one in progress investigates the accountability of Mr. Mayhew and of another PetroRio executive for violating a CVM ruling that addresses the registration of securities traded on regulated markets. PetroRio’s press office argues that there is a divergence of understanding on the regulation. The administrative proceedings also include José Mauro Mettrau Carneiro da Cunha, chairman of Oi board, and William Connel Steers, alternate member appointed by Mr. Tanure but not yet authorized by the National Telecommunications Agency (Anatel). Contacted by Valor, Mr. Cunha declined to comment. Mr. Steers could not be reached.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 04, 2017
Insurers suit leads to freeze of José Efromovich shares in Avianca

Avianca Brasil had shares of its controlling shareholder José Efromovich blocked by the Court of Justice of São Paulo after a lawsuit filed by Chubb Seguros Brasil and Fator Seguradora. The freeze, ordered on October 27 by an appeals court, was requested by the insurers to execute the counter guarantee of the policy that insured the delivery of vessels ordered to shipyards controlled by Germán Efromovich. When contacted by Valor, José Efromovich said that neither he nor Avianca Brasil have “anything to do with the dispute between the insurers and the shipyards of [his] brother Germán.” “I will address this matter in court,” he said. José Efromovich said that Avianca Brasil, the country’s fourth largest airline, is controlled solely by him, while his brother Germán controls the shipyards and Avianca Holdings, Colombia’s largest airline.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 04, 2017
E-commerce to account for half of Magazine Luiza revenues in 5 years

The strong growth of e-commerce at department-store chain Magazine Luiza is likely to help the operation account for 50% of revenues in less than five years. In the third quarter, the online unit reached 30% on gross revenue of R$3.43 billion, an increase of 5.3 percentage points over the same period of 2016. “There is no internal target, but it is consensus among analysts that the virtual store will account for half of the revenue in that period. We believe this expectation is conservative,” said Magazine Luiza CEO Frederico Trajano. Online sales rose 54.6% in the quarter, while E-bit consultancy data show the market growing by 9.4%. For Mr. Trajano, two factors drove this expansion: the use of smartphones and the recovering economy.

Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 03, 2017
TPI and Concer closer to approval of extrajudicial recovery plan

Infrastructure group Triunfo Participações e Investimentos (TPI) and its subsidiary Concer may be closer to obtaining approval of an extrajudicial recovery plan filed on July 22. On Wednesday, the court denied injunctions filed by creditors against the plan. But it has determined that the group presents in five days a complete list of all creditors, and not only those covered by the plan, which are from the financial industry. The judge understood that the Brazilian Development Bank (BNDES) — TPI’s largest creditor, with R$980 million in credits — is prevented from voting on the recovery plan because of a conflict of interest. BNDESPar, its investment arm, is a shareholder of TPI. The approval of the restructuring plan by creditors was only possible because BNDES was not considered in order to obtain the quorum.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 03, 2017
BNDES expanding investment funds for startups, infrastructure

Brazilian Development Bank (BNDES) is structuring four new funds to bolster its involvement in private equity and venture capital. The funds, which will include debt funds and partnerships with angel investors, will have more than R$500 million to invest in startups, innovative companies, and in infrastructure, about half of which will come from the BNDES. The bank wants to work alongside market actors in order to encourage growth of the capital markets, BNDES director of capital markets Eliane Lustosa says.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 02, 2017
CVM identifies four infractions by investor Tanure since 2005

Nelson Tanure, the businessman who after investing R$70 million in the purchase of a minority stake in Oi gained prominence over the telco, has violated CVM rules more than once in the previous decade. There are four infractions identified by the market regulator, related to four different companies: Docas Investimentos (2005), Subestação Eletrometrô (2014), Verolme-Ishibras (2015) and PetroRio (2016). The infractions reported by CVM were related to “breach of fiduciary duties” and non-compliance with articles 153 (duty of diligence) and 155 (duty of loyalty) of the Brazilian Corporation Law. The information is available on the CVM website.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 02, 2017
Carlyle Group divests controlling stake in developer Urbplan

Carlyle Group sold developer Urbplan Desenvolvimento Imobiliário to investors. In its third-quarter figures released Tuesday, Carlyle said it had relinquished its controlling stake in the developer but did not make it clear whether it had sold the entire company or made it available for sale. Contacted by Valor, Ivix Value Creation — a company that specializes in corporate restructuring and that took over Urbplan’s management in September — said that it was aware of the sale to an investor group of BRL4 — created by Carlyle, and through which it controlled Urbplan. Carlyle said in its report that with the sale of its stake and the removal of Urbplan from its balance sheet, it had to write down $65 million before taxes.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 01, 2017
Petrobras and China’s CNPC study expanding partnership in refining

Talks between Petrobras and China’s CNPC for partnerships in refining may involve a “broader” agreement than investments in the Itaboraí refinery of the Rio de Janeiro Petrochemical Complex (Comperj). Petrobras CEO Pedro Parente signaled Tuesday that the search for a partner to complete the construction of the Rio refinery may also include other investments in the refining sector in that state. Comperj works have already absorbed investments of $13 billion, and have been stalled since 2015. Mr. Parente also said the state-owned oil company plans to resume “very briefly” construction of the complex’s natural gas processing unit (with 36% of works carried out).
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 01, 2017
STJ clears arbitration chamber from legal liability

The 3rd Group of the Superior Court of Justice (STJ) blocked defeated parties from filing suit against an arbitration ruling. STJ justices accepted an appeal from the Brazil Business Arbitration Chamber (Camarb), which was included as a defendant in a lawsuit between two companies over arbitration. Experts say it is the high court’s first ruling on the issue. The justices wrote that “arbitration institutions that simply manage arbitration proceedings don’t have a legal interest or legitimacy to join the defendants in a lawsuit seeking to revoke its decision.” A small business called BM Chami Indústria e Comércio de Premoldados de Concreto filed suit against PUR Equipamentos Industriais, arguing that it didn’t assent to arbitration proceedings, and requested that Camarb be included as a defendant in the case.
Source: Valor Econômico S. A.
http://www.valor.com.br/international

November 01, 2017
Activation of thermal plants under study amid scarce rainfall

With reservoirs at hydroelectric dams dropping due to scarce rains, the government is considering anticipating the use of more costly thermal power plants in order to ensure that the country generates enough power. Ignoring the so-called order or merit – which establishes that more efficient plants are turned on before the costlier oil-burning plants are brought online – and instead opting for the use of plants based on their assured generating capacity would drive power costs even higher. But it would also provide some relief until the rainy season starts in earnest, Mines and Energy Minister Fernando Coelho Filho acknowledged ahead of a meeting with oil and energy executives in Rio de Janeiro on Monday.
Source: Valor Econômico S. A.
http://www.valor.com.br/international