Viracopos facing tough choice between forfeiture and liquidation

The problematic concession of Viracopos airport in São Paulo is reaching a breaking point as operator ABV prepares to hold a creditor meeting on Tuesday. It appears increasingly likely creditors will vote down its plan to sell the concession to another investor, and push the company into liquidation, say people familiar with the matter. Triunfo Participações and UTC control ABV, and both are embroiled in Operation Car Wash and financially strained as well. ABV filed for bankruptcy protection in May 2018 and since then has been trying to find a solution for billions of reais in regulatory fines and R$2 billion in debts to the Brazilian Development Bank (BNDES). However, negotiations for a potential rate cut or grace period on the debts stopped evolving, and the most likely scenario is liquidation followed by re-auctioning the asset, and it remains unclear whether ABV will get reimbursed for what it has invested so far.

Source: Valor Econômico

http://www.valor.com.br/international

 

Small bookstores gain ground amid digital age

The model of giant bookstores that had dominated the world is reversing, says editor and bookseller Alexandre Martins Fontes. “People now want bookstores with soul, with a careful selection of titles and a space for socializing,” says the owner of Martins Fontes, which has two stores in São Paulo where sales have been growing 38% this year. The Paulista Avenue location had R$26 million in revenue in the past year. Mr. Fontes says he was inspired by Livraria Cultura 20 years ago, before the chain embarked on the megastore concept. While Amazon dominates the internet market with its low prices, companies are starting to realize the real value of physical stores, unlike what happened in the early 2000s. Rui Campos, owner of Travessa, a small bookstore chain from Rio de Janeiro, remembers when e-books were expected to quickly dominate the market because while printed matter would disappear. “The paradox is that printed books started to be increasingly valued and people began to look for places to connect.”

Source: Valor Econômico

http://www.valor.com.br/international

 

Guedes clinches deal to accelerate tax reform

Economy Minister Paulo Guedes has reached an agreement with congressional leaders to seat a select committee to review tax reform and accelerate constitutional amendments in both houses. The rapporteur of the Senate proposal, Roberto Rocha (Brazilian Social Democracy Party, PSDB, of Maranhão) would chair the committee while Deputy Aguinaldo Ribeiro (Progressive Party, PP, of Paraíba) would take on the rapporteur role again. The select committee holds no power over the proposal but could hasten negotiations and result in a clean bill with better chances of clearing both houses of Congress. Mr. Guedes is promising to send his reform proposal next week, potentially including the unification of federal levies into a value-added tax (VAT).

Source: Valor Econômico

http://www.valor.com.br/international

 

Servtec expands into distributed solar generation

Pioneering Brazilian wind-power company Servtec is expanding into distributed generation with solar power. The company will invest R$68 million to purchase four solar plants in São Paulo and Bahia with a total capacity of 15 megawatts-peak and expected to commence operating this year. Another Brazilian firm, SolarGrid, developed them, and they already include long-term contracts with telecommunication clients. Servtec Energia president Pedro Fiuza says the distributed generation business is expected to generate revenue of R$180 million by 2020, about 20% of the company’s current sales.

Source: Valor Econômico

http://www.valor.com.br/international

 

Petrobras reviews quarterly dividend policy

Petrobras wants to review its quarterly dividend policy at the general meeting scheduled for Monday. The new format is in line with a policy review introduced in August that was devised to allow the state-owned giant more freedom to define whether to make the distribution. The proposed changes, which take into account cash flow and debt levels (mandatory minimum payment whenever the gross debt is higher than $60 billion) before deciding dividends, were already approved by the board.

Source: Valor Econômico

http://www.valor.com.br/international

 

AT&T rules out buying Oi as funding options remain slim

Federal officials say the recovery of Oi faces a few obstacles to selling its mobile operations, borrowing more (for which it would have to pay higher than the market average) or even an outright sale to US carrier AT&T. A new creditor meeting would have to decide whether to endorse the mobile assets sale under discussion with rivals Telefônica Vivo and TIM, the officials say. A spinoff itself would be problematic and legally controversial amid an incourt restructuring, experts say. Meanwhile, rumors of a potential deal with AT&T are waning as a person familiar with the matter says the carrier’s CEO, Randall Stephenson, while interested in investing in Brazil once Congress clears reforms for the industry, is more keen on content than on assets. Oi’s best hope at this point is to sell a 25% stake in Angola carrier Unitel for about $1 billion – the company issued a material fact on Monday confirming it is focused on selling no-core assets. Sought by Valor, Oi declined to comment.

Source: Valor Econômico

http://www.valor.com.br/international

 

Magazine Luiza intensifies Netshoes integration push

Over the last six weeks, Magazine Luiza has set up 34 different integration fronts for Netshoes, the online shoe retailer it purchased back in June. Company officials expect to take another six weeks conducting internal studies but by mid-October begin allowing Netshoes buyers to pick up at its stores any purchases. São Paulo will be the first city to begin offering the option with other capitals following in 2020. Magazine Luiza has about 1,000 locations in Brazil, of which 341 are more robust and can operate as mini-distribution centers. Sellers of the marketplace of Netshoes, however, will have to wait.

Source: Valor Econômico

http://www.valor.com.br/international

 

Brazilians want brands to offer better service and protect environment

Customer service and environmental protection are the two main concerns of Brazilians in relation to brands. On the first item, 66% of the companies are failing – and the hotel, bank and airline sectors have the worst scores. On the second topic, 58% of the companies present performance below expected, mainly car, hygiene and beauty products and alcoholic beverage makers. These are some of the conclusions of the Authenticity Gap study, conducted by public relations agency FleishmanHillard between April and May in six countries. Brazil participated for the first time with 1,328 respondents. Consumers evaluated 160 companies in 20 industries. The survey intends to detect if there is a difference between expectations in relation to the brands and what they effectively deliver to the consumer.

Source: Valor Econômico

http://www.valor.com.br/international

 

Enel eyeing 80% boost in renewable capacity in Brazil

After heading the two largest power distribution deals in Brazil since 2016 (the purchase of Celg in 2016 and of Eletropaulo in 2018), Italian giant Enel plans to expand renewable generation capacity in the country by 80% in the next few years. The company already owns 2.4 gigawatts of renewable sources and is investing in adding another 1.9GW as part of a bold strategic plan for Brazil with R$17 billion in investments until 2021, of which R$10 billion are going into distribution. The Eletropaulo deal made Enel the largest private-sector distributor in Brazil with 17 million subscribers in Rio de Janeiro, São Paulo, Goiás and Ceará states. There are no plans to purchase Rio distributor Light, executives say

Source: Valor Econômico

http://www.valor.com.br/international

Argentina tops Brazil in beef sales to China

Argentina accelerated its beef exports to China and dethroned Brazil as the main foreign supplier to the Asian country in the first seven months of 2019. Argentine shipments reached 186,000 tonnes from January to July, Chinese customs data compiled by “Beef to China” show, compared to Brazilian sales of 180,000 tonnes. Argentina earned $870.1 million, more than double the figure for the same period in 2018. The volume sold represented 70% of Argentina’s total beef exports in the period, and 21.7% of China’s imports – the Brazilian share was 21%. In total, the country’s beef shipments are likely to reach 720,000 tonnes in 2019, or $4 billion. Argentina will probably remain, for the second consecutive year, in the ranking of the ten largest beef exporters in the world. In 2018, the country occupied the 6th position, with shipments of 550,500 tonnes, behind Brazil, India, Australia, USA and New Zealand. This year, it could reach the 5th position.

Source: Valor Econômico

http://www.valor.com.br/international