Brazil headlines from Valor Econômic

POLITICS

Electoral court expected to maintain Temer in presidency

But Office of Prosecutor General will keep pressure on government with expected presentation of formal charges
BUSINESS

BRMalls and Aliansce in talks to merge operations

Negotiations have advanced in recent weeks, sources say; deal would create Brazil’s largest mall operator
AGRIBUSINESS

Cattle slaughter for JBS shows sharp reduction

Company is cutting back purchases and paying more for cattle amid uncertainty in wake of scandal; parent J&F signs leniency agreement
MARKETS

Petrobras and Banco do Brasil join governance model of state companies

Launched a year and a half ago, stock exchange’s initiative aims to improve controls and transparency
BUSINESS

Parente to unveil model for refining divestments and partnerships

Petrobras CEO plans to announce new price policies and opportunities for partnerships for refining in coming months

COMMENTARY

Raymundo Costa

The day after the TSE trial 

The economy seems to have learned how to deal with the political crisis

It is time for consequentialist ethics

Operation Car Wash is in fact the only national unanimity today

Bet on the economic team and on the center-right in 2019

Crisis escalates, produces parallel agenda, but falling interest rates and low stock of currency swaps calm the markets
  • BUSINESS

    Internal probe reveals division in Usiminas management 

    Case against CFO Ronald Seckelmann was dismissed by ethics committee, but outcome could have been different if vote was taken just days earlier
    • ECONOMY

      GDP expansion fails to improve population’s well-being 

      LCA study shows economic growth will return to pre-recession levels only from 2021
      • POLITICS

        Government fears charge against Temer to pressure electoral court

        Government fears charge against Temer to pressure electoral court
        Planalto sees prosecutor general acting to try and convince TSE justices to vote for annulment of Rousseff-Temer election
      • POLITICS

        Temer focuses on economy in attempt to remain in office 

        Temer focuses on economy in attempt to remain in office
        President orders new package of policies to stimulate economy and divert attention from political turmoil 
      • POLITICS

        Bolsonaro voter doesn’t take his words so seriously

        Bolsonaro voter doesn’t take his words so seriously
        Study shows that supporters of the radical right-wing deputy like his proposals about security but know little of his other ideas 
      • AGRIBUSINESS

        Banks reject reorganization plan of Usina São Fernando

        Sugar and ethanol company of José Carlos Bumlai was affected by Operation Car Wash’s charges against the businessman
      • BUSINESS

        Aché paves pathway towards greater international presence

        Aché paves pathway towards greater international presence
        Pharmaceutical company aims to expand exports to more than 5% of revenues in next 5 years
      • ECONOMY

        Agriculture makes economy grow for the first time in two years

        Agriculture makes economy grow for the first time in two years
        First-quarter GDP growth of 1% hides bad signs in demand, which may be worsened by the political crisis
      • POLITICS

        Car Wash investigators gear up for battle

        Car Wash investigators gear up for battle
        Feeling the gathering of political forces to rein in the anti-corruption operation, investigators may bring more charges against authorities
      • POLITICS

        Country still trapped in cycle of upheaval

        Country still trapped in cycle of upheaval
        Bitter polarization that emerged after the 2013 protests still dominates the country and could topple second president in a little over one year
      • AGRIBUSINESS

        J&F prepares strategy to defend plea agreement

        J&F prepares strategy to defend plea agreement
        Holding company will work on four fronts to maintain benefits obtained by brothers Joesley and Wesley Batista and defend them from new charges
      • AGRIBUSINESS

        Leniency deal lowers chance of fire sale at J&F

        Sale of Vigor and other operating activities would be enough to cover R$10.3bn penalty payable in 25 years, curbing market expectations
      • LIFE & CULTURE

        The suspense plot of Brazilian publishing

        The suspense plot of Brazilian publishing
        Sales are declining and bookstores are downsizing as market reacts to a double crisis: in the economy and from shifting consumer habits
      • MARKETS

        Burden of corporate debt expenses has sharp drop

        Burden of corporate debt expenses has sharp drop
        Falling interest rate provides relief to companies, but political uncertainty may prevent further improvements as market seizes up
      • AGRIBUSINESS

        Arlon buys 20% of dairy group Betânia

        With the stake, US investment fund strikes third deal in Brazil and expands operations in the Northeastern market
      • BUSINESS

        Brio readies investments after three-year halt

        Brio readies investments after three-year halt
        Founded by a Gafisa veteran and his sons, firm plans to raise second R$100m fund to invest in slices of top-level residential developments
      • AGRIBUSINESS

        Leniency deal relieves JBS, but crisis is not over yet

        Nothing prevents lawsuits demanding additional compensation from the company
      • AGRIBUSINESS

        Extended term and ‘zero interest’ bring R$4bn discount to J&F

        Extended term and ‘zero interest’ bring R$4bn discount to J&F
        With a R$7.2bn fine at present value, penalty is still the world’s biggest among corruption cases
      • MARKETS

        Political crisis could shorten rate easing cycle

        Political crisis could shorten rate easing cycle
        Monetary Policy Committee admits effect of rising uncertainty on customary statement after meeting that cut Selic to 10.25% from 11.25%
      • AGRIBUSINESS

        J&F in talks for leniency agreement in the US

        Despite change of lawyers in Brazil, case is still handled by Baker & McKenzie, one of the world’s largest law firms
      • POLITICS

        Temer fine-tunes survival strategy

        Officials believe president is gradually leaving the crisis behind him; defense plans to challenge the legality of evidence

        Scandinavian telecom AINMT to buy Nextel Brasil for $200m

        18 hours and 4 minutes ago
        • Scandinavian telecom operator AINMT announces this Tuesday the purchase of Nextel in Brazil for $200 million. The transaction will be carried out in two stages. In the first, the company will inject $50 million in Nextel Brasil through NII Holdings, holding company that controls the Brazilian unit. With this capitalization, AINMT will control 30% of Nextel. When the Brazilian telco concludes negotiations to lengthen its debts, which totaled $756 million in 2016, AINMT will then begin the second stage of the transaction, Nextel Brasil’s president, Roberto Rittes, told Valor. In this stage, a new investment of $150 million will be made. At the conclusion, the Scandinavians will hold a majority stake in Nextel (60%), while NII will keep the remaining 40%. Nextel Brasil has 3 million clients.

          Valepar says it will not renew its share agreement after 2020

          18 hours and 4 minutes ago
          • Three weeks ahead of Vale’s extraordinary shareholders meeting to discuss the voluntary conversion of its preferred shares into common stocks, Vale’s holding company Valepar announced that it will not renew its shareholders agreement after November 2020. Vale told Valor that the announcement is an additional clarification to investors and that no group will be able to control more than 25% of the mining company after that time without an obligation to hold a public share offering. At the upcoming shareholders meeting scheduled for June 27, shareholders will discuss the voluntary conversion at a ratio of 0.9342 common share per preferred share. Until 2020, the shareholders that make up Valepar will collectively hold around 30% of Vale due to the premium related to the stock conversion, but the situation is understood to be temporary. 

            Bolognesi in advanced talks to sell thermoelectric plants to Prumo

            18 hours and 4 minutes ago
            • Rio Grande do Sul-based Bolognesi is in advanced negotiations with logistics company Prumo — now controlled by US private-equity firm EIG Global Energy Partners — for the sale of the 1.2-gigawatt thermoelectric plant Novo Tempo, in Pernambuco, along with a LNG regasification terminal. Valor has learned the deal could involve the Rio Grande thermoelectric plant, which also has 1.2GW, and would include the construction of another LNG terminal. Contacted by Valor, Bolognesi confirmed talks with Prumo. The latter, in turn, did not respond to requests for an interview. The two thermoelectric projects were sold at an auction in late 2014 for delivery in January 2019 and December 2020 for R$206.50 per megawatt-hour. At the time, investments were estimated at R$3 billion to carry out each of the projects.

              Hedge plans to raise up to R$1.2bn for investments in real estate 

              18 hours and 4 minutes ago
              • Asset manager Hedge Investments plans to raise between R$1 billion and R$ 1.2 billion in the second half for investments in the real estate market. Hedge intends to raise the amount in the next 18 months with domestic and foreign investors and use the proceeds to acquire warehouses, corporate slabs and shopping centers. The company has about R$1.5 billion under management. Hedge partner André Freitas thinks the warehouse segment is likely to be the first to recover, probably by the year’s end. Hedge sees the office market improving in two years, but estimates that this process may begin earlier, in 2018, for triple-A slabs. The shopping mall segment is expected to recover in three years. The asset manager is not interested in the residential market in the short term.

                China’s Pengxin seeks to double sales of trading company Belagrícola

                18 hours and 4 minutes ago
                • Chinese group Pengxin has just completed its second acquisition in the country — the purchase of the control of Paraná-based Belagrícola — and already indicates that it has ambitious plans for Brazil. Belagrícola operates in grain trading in Paraná, Santa Catarina and São Paulo, and had gross sales of R$2.8 billion last year. In an interview with Valor, Belagrícola’s president, Flavio Andreo, said the plan is to double revenues in five years, „maybe even less, depending on the circumstances.“ Mr. Andreo, who took over in January after the acquisition by the Chinese group, said the new controlling shareholders plan to raise Belagrícola’s market share in regions where the company has been present for less than three years to 25% to 30% from the current 10% This will include areas such as Itapeva, in the south of São Paulo, and areas in the southern region of Paraná and Santa Catarina.

                  Cade to require sale of classroom programs of Kroton, Estácio

                  18 hours and 4 minutes ago
                  • The merger between educational companies Kroton and Estácio should involve the sale of an asset related to classroom courses as well as online education, according to demands raised at the Cade antitrust court. The expectation is that the transaction is ruled upon by the court on June 28. The court has reportedly received pressure from third parties interested in the case and has faced additional scrutiny because the matter involves educational institutions. According to a report published by Bloomberg, Cade will require the sale of Anhaguera’s classroom teaching program for approval of the merger. 

                    MRV to invest R$800m through 2022 in solar power panels 

                    18 hours and 4 minutes ago
                    • Solar power panels will be used in MRV Engenharia’s project of new buildings. The company, one of the leaders of the federal housing program’s My House, My Life, plans to include the equipment in 30% of its launches this year. In five years, that share will rise to 100%. The planned investment totals nearly R$800 million through 2022. Rubens Menin, founder and chairman of MRV, says this year 17,000 apartments will be part of buildings with photovoltaic panels. The real estate company did not disclose how many launches it will have this year. In 2016, there were 82.

                      MMX Sudeste to try changes in judicial recovery plan on June 20

                      18 hours and 4 minutes ago
                      • MMX Sudeste, mining company of businessman Eike Batista, will try to approve changes in the company’s judicial recovery plan, approved in August 2015. On June 20, there will be a general meeting of MMX Sudeste’s creditors to approve the spin-off of several farms owned by the company, which two years ago had been valued at R$45 million. In total, there are about 2,500 hectares of farms that MMX expects to take to auction as isolated production units (UPIs). The farms are among the company’s main assets to pay its creditors, which are owed more than R$700 million.
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