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T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Thursday, March 24, 2022, Vol. 23, No. 54
Headlines
A R G E N T I N A
ARGENTINA: IMF Moves Next Debt Maturity Date to March 31
STONEWAY CAPITAL: Gets Court Okay to Seek Exit Plan Votes
B R A Z I L
BRAZIL: Narrows 2022 Deficit Projection on Higher Oil Royalties
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Producers Denounce Import of Citrus w/ Pests
J A M A I C A
NATIONAL COMMERCIAL BANK: Closing Some Branches in May
M E X I C O
GRUPO AEROMEXICO: Exits Bankruptcy With $5 Bil. Fleet Investment
P E R U
[*] PERU: Expected to Receive 1.5 Million Foreign Tourists by 2022
P U E R T O R I C O
[*] Puerto Rico Bankruptcy Filings Decreased 21% in February 2022
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A R G E N T I N A
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ARGENTINA: IMF Moves Next Debt Maturity Date to March 31
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Rio Times Online report that through a press release, the
International Monetary Fund (IMF) announced that Argentina's debt
maturities of March 21 and 22 would be moved to the last day of the
month without incurring delays.
The international organization's spokesman Gerry Rice said, "the
authorities have informed the IMF that they will combine
Argentina's payment obligations maturing on March 21 and 22 into a
single repurchase to occur before March 31, 2022, for a total
amount equivalent to US$2 billion," reports Rio Times.
This measure is part of the new program agreed with the Argentine
Government, the report relays.
IMF Statement
Gerry Rice, Director of Communications at the International
Monetary Fund (IMF), issued the following statement on Argentina:
"We welcome the Argentine National Congress's recent approval of
the agreement reached with IMF staff to be supported by an Extended
Fund Facility (EFF) Arrangement. The IMF places great value on
broad societal support for program success and the legislative
approval is an important signal that Argentina is committed to
policies that will encourage more sustainable and inclusive growth.
It is also testament to the dedication and hard work of the
Argentine authorities that has helped to achieve this significant
step forward.
"To allow time to take account of the fast-changing global
environment-including the war in Ukraine-the IMF Executive Board
will meet to discuss Argentina's request for an IMF-supported
program on Friday, March 25.
"I can also confirm that the authorities have informed the IMF that
they will combine Argentina's March repayment obligations due on
March 21 and March 22 into a single repurchase before March 31,
2022, for a total amount equivalent to about SDR 2.014 billion. The
government's decision, which does not require approval by the IMF's
Executive Board, is consistent with IMF rules [1] and with
Argentina remaining current on its payments to the Fund and,
therefore, not incurring arrears."
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Alberto Angel Fernandez is
the current president of Argentina after winning the October 2019
general election. He succeeded Mauricio Macri in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
Standard & Poor's credit rating for Argentina stands at CCC+ with
stable outlook, which was a rating upgrade issued on Sept. 8,
2020.
Moody's credit rating for Argentina was last set at Ca on Sept.
28, 2020. Fitch's credit rating for Argentina was last reported on
Sept. 11, 2020 at CCC, which was a rating upgrade from CC. DBRS'
credit rating for Argentina is CCC, given on Sept. 11, 2020.
As reported by The Troubled Company Reporter - Latin American, DBRS
noted that the recent upgrade in Argentina's ratings (September
2020) follows the closing of two debt restructuring agreements
between the Argentine government and private creditors. The first
restructuring involved $65 billion in foreign-law bonds. The deal
achieved the requisite participation necessary to trigger the
collective action clauses and finalize the restructuring on 99% on
the aggregate principal outstanding of eligible bonds. DBRS added
that the debt restructurings conclude a prolonged default and
provide the government with substantial principal and interest
payment relief over the next four years.
DBRS further relayed that Argentina is also seeking a new agreement
with the International Monetary Fund (IMF) to replace the canceled
2018 Stand-by Agreement. Formal negotiations on the new financing
began in November 2020. Obligations to the IMF amount to $44
billion, with major repayments coming due in 2022 and 2023.
STONEWAY CAPITAL: Gets Court Okay to Seek Exit Plan Votes
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Jeremy Hill of Bloomberg News reports that Argentine power plant
owner, Stoneway Capital Corp. won court approval to begin gathering
creditor votes on its plan to exit bankruptcy.
U.S. Bankruptcy Judge James Garrity in a hearing Thursday, March
17, 2022, said he'd approve Stoneway's so-called disclosure
statement, which is an outline of its bankruptcy plan that is sent
to creditors. No creditors objected to the disclosure statement.
Stoneway estimates senior noteholders may recover as little as 16%
under the plan, while term loan holders will get as little as
4.5%.
Senior noteholders would share a pool a $462.5 million of new
notes, according to the disclosure statement.
About Stoneway Capital Corp.
Stoneway Capital Corporation is a limited corporation incorporated
in New Brunswick, Canada, formed for the purpose of owning and
operating, through its Argentine subsidiaries, power generation
projects that will provide electricity to the wholesale electricity
markets in Argentina. The Argentine subsidiaries operate four
power-generating plants in Argentina that provide electricity to
the wholesale electricity market in Argentina.
Stoneway is 100% owned by GRM Energy Investment Limited.
On Oct. 8, 2020, the Company commenced proceedings under the Canada
Business Corporations Act (the "CBCA"). The Debtors were well on
the way toward closing the consensual restructuring when on Dec. 4,
2020, the Argentine Supreme Court issued a decision in an ongoing
noise discharge dispute involving one of the Generation Facilities
located in Pilar, Argentina. The Argentine Supreme Court Decision
created significant uncertainty as it overturned a decision of the
federal appeals court in San Martin, Buenos Aires.
As a result of the looming expiration of the informal standstill
arrangement, the Debtors commenced chapter 11 cases in the U.S. in
order to put the automatic stay in place, maintain the status quo
pending resolution of the various issues in Argentina, and ensure
that neither the Indenture Trustee nor the Argentine Trustee takes
any action that could be detrimental or value destructive to the
Company.
Stoneway Capital Ltd. and five related entities, including Stoneway
Capital Corp., sought Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 21-10646) on April 7, 2021. Stoneway estimated
liabilities of $1 billion to $10 billion and assets of $500 million
to $1 billion.
Judge James L. Garrity, Jr., oversees the cases.
The Debtors tapped Shearman & Sterling LLP as bankruptcy counsel,
Bennett Jones LLP as Canadian counsel, Lazard Freres & Co. LLC as
investment banker, and RSM Canada LLP as tax services provider.
Prime Clerk, LLC is the claims agent and administrative advisor.
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B R A Z I L
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BRAZIL: Narrows 2022 Deficit Projection on Higher Oil Royalties
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Marcela Ayres at Reuters reports that Brazil's government foresees
a smaller primary budget deficit this year on the back of higher
revenues, especially from oil royalties, the economy ministry's
bi-monthly revenue and expenditure report indicated.
The 2022 primary deficit for the central government is now expected
at BRL66.9 billion ($13.58 billion), down from BRL76.2 billion
calculated in the budget law, equivalent to 0.69% of gross domestic
product compared with 0.80% previously, according to Reuters.
That represents an even better primary result than the official
deficit target of BRL170.5 billion for this year, and comes mainly
from an increase of roughly BRL42 billion in projected net revenue,
the report notes.
The economy ministry raised its estimates for revenues from the
exploration of natural resources by BRL38.6 billion, at a time when
rising oil prices due to the conflict in Ukraine improved prospects
for royalties, the report relays.
The government now considers an average oil price per barrel at
$103.4 in 2022, up from $77.4 previously, the report discloses.
"There was a very strong growth in Brent (crude prices) and a new
oil production curve, with faster and stronger production expected
in the short term", said Special Treasury and Budget Secretary
Esteves Colnago, the report says.
Regarding expenses, the outlook was also increased by BRL32.7
billion for 2022, the report indicated, mainly due to the addition
of BRL23.8 billion in extraordinary credits, the report relays.
To comply with the spending cap rule, which limits spending growth
to the previous year's inflation, the government said it would need
to freeze BRL1.7 billion in this year's budget, the report adds.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Jair Bolsonaro is the current president, having
been sworn in on Jan. 1, 2019.
Standard & Poor's credit rating for Brazil stands at BB- with
stable outlook (April 2020). S&P's 'BB-/B' long-and short-term
foreign and local currency sovereign credit ratings for Brazil were
affirmed in December 2021 with stable outlook. Fitch Ratings'
credit rating for Brazil stands at 'BB-' with a negative outlook
(November 2020). Fitch's 'BB-' Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) has been affirmed in
December 2021. Moody's credit rating for Brazil was last set at
Ba2 with stable outlook (April 2018). DBRS's credit rating for
Brazil is BB (low) with stable outlook (March 2018).
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Producers Denounce Import of Citrus w/ Pests
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Dominican Today reports that national citrus producers denounced
that the Ministry of Agriculture has authorized the import into the
Dominican Republic of several agricultural products infected with
pests and diseases.
They affirmed that the Minister of Agriculture, Limbert Cruz, fails
to fulfill his promise to care for and protect the Dominican citrus
industry by allowing the importation of citrus fruits from
countries that have diseases that do not exist in the Dominican
Republic, according to Dominican Today.
They indicated that they have photos and official documents with
the traceability of cardboard boxes from Peru and Chile, which puts
the country in potential danger by bringing fruits and vegetables
from areas affected by Fusarium Race 4 that destroys the Colombian
and Peruvian banana industry, the report notes.
They also explained that Chile is positive for Leprosis and the
Mite that transmits this terrible disease and indicated that the
Defoliation Ant is also present in Colombia, the report relays.
They warned that all these diseases would come to the country if
the authorities continued the unbridled race to grant import
permits, the report discloses.
They reported that Sanidad Vegetal recently carried out a study of
the country's risks by bringing fruits and vegetables from areas
affected by Fusarium Race 4, which threatens to destroy the local
banana industry, as has happened with much of Colombia and Peru,
Dominican Today adds.
About Dominican Republic
The Dominican Republic is a Caribbean nation that shares the island
of Hispaniola with Haiti to the west. Capital city Santo Domingo
has Spanish landmarks like the Gothic Catedral Primada de America
dating back 5 centuries in its Zona Colonial district. Luis Rodolfo
Abinader Corona is the current president of the nation.
TCRLA reported in April 2019 that the Dominican Today related that
Juan Del Rosario of the UASD Economic Faculty cited a current
economic slowdown for the Dominican Republic and cautioned that if
the trend continues, growth would reach only 4% by 2023. Mr. Del
Rosario said that if that happens, "we'll face difficulties in
meeting international commitments."
An ongoing concern in the Dominican Republic is the inability of
participants in the electricity sector to establish financial
viability for the system.
Fitch Ratings, in December 2021, revised the Outlook on Dominican
Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR)
to Stable from Negative and affirmed the IDRs at 'BB-'. The
revision of the Outlook to Stable reflects the narrowing of
Dominican Republic's government deficit and financing needs since
Fitch's last review resulting in the stabilization of the
government debt/GDP ratio, as well as the investment-driven
economic momentum, reflected in the faster-than-expected economic
recovery in 2021 that Fitch expects to carry into above-potential
GDP growth during 2022 and 2023.
Standard & Poor's, also in December 2021, revised its outlook on
the Dominican Republic to stable from negative. S&P also affirmed
its 'BB-' long-term foreign and local currency sovereign credit
ratings and its 'B' short-term sovereign credit ratings. The
stable outlook reflects S&P's expectation of continued favorable
GDP growth and policy continuity over the next 12 to 18 months that
will likely stabilize the government's debt burden, despite lack of
progress with broader tax reforms, S&P said. A rapid economic
recovery from the downturn because of the pandemic should mitigate
external and fiscal risks.
Moody's affirmed the Dominican Republic's long-term issuer and
senior unsecured ratings at Ba3 and maintained the stable outlook
in March 2021.
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J A M A I C A
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NATIONAL COMMERCIAL BANK: Closing Some Branches in May
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RJR News reports that the National Commercial Bank (NCB) will be
closing some of its branches.
It's reported that the Oxford Road, Cross Roads, Hagley Park Road
and Washington Boulevard locations will cease operations, effective
May 6, according to RJR News.
However, the 24/7 Bank on the Go areas and automated banking
machines will remain at all of the locations, except Oxford Road,
the report relays.
In St. Elizabeth, the Black River in-branch service will also be
closed while retaining the Bank on the Go area, the report
discloses.
The Junction branch, also in St. Elizabeth, will reintroduce
limited in-branch cash services at the end of this month, the
report adds.
As reported in the Troubled Company Reporter - Latin America
on January 27, 2022, Fitch Ratings has affirmed National Commercial
Bank of Jamaica Limited's (NCBJ) Long-Term Foreign and Local
Currency Issuer Default Ratings (IDRs) at 'B+'. The Rating Outlook
on the IDR has been revised to Stable from Negative.
Last December 27, 2021, S&P Global Ratings affirmed the 'B+'
long-term
and 'B' short-term issuer credit ratings on NCBJ. The affirmation
follow a revision to its criteria for rating banks and nonbank
financial institutions and for determining a Banking Industry
Country Risk Assessment (BICRA).
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M E X I C O
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GRUPO AEROMEXICO: Exits Bankruptcy With $5 Bil. Fleet Investment
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Grupo Aeromrxico, S.A.B. de C.V. (BMV: AEROMEX) said March 17,
2022, that it has consummated its Plan of Reorganization (and
ancillary documents thereto) and it has successfully concluded its
financial restructuring process and emerged from its Chapter 11.
The delivery of the new listed and consolidated shares (reflecting
the effects of the consolidation (reverse split) of shares),
representing the new capital stock of the Company, will be
delivered, directly through the S.D Indeval, Institucion para el
Deposito de Valores, S.A. de C.V., or through the custodian broker
S3 Caceis, in favor of the brokers and/or custodians of
shareholders owning shares representing the new capital stock of
Aeromexico.
As set forth in the Plan of Reorganization, the equity value of the
reorganized Company is approximately US$2,564,000,000 dollars, and
the new outstanding listed shares are 136,423,959 (excluding
treasury shares pending to be subscribed in the amount of
13,642,396). The authorized total amount of shares issued by the
Company are 150,066,355 shares.
The theoretical value of the new shares is approximately of
$389.0187 pesos per share (Plan value of the Company
(US$2,564,000,000 dollars) divided by new subscribed shares
(136,423,959), which results in approximately US$18.79 dollars per
share converted at the official exchange rate ($20.7035 pesos per
one dollar of the United States of America) published today by the
Central Bank of Mexico in the Official Gazette of the Federation
(Diario Oficial de la Federacion)), which should start being
reflected by the market.
The largest shareholders of the reorganized Company include funds
managed by Apollo Global Management, Delta Air Lines, as well as
existing and new Mexican investors that formed the group with
voting control. The Baupost Group, Silver Point Capital, Oaktree
Capital Management and other funds that were part of the ad hoc
groups of creditors are also shareholders after investing
approximately US$720 million in new capital. This is in
addition to other amounts related to fees accrued on the "DIP
Facility" and on the new equity contributions payable in new stock
as provided in the Plan of Reorganization.
Additionally, key stakeholders are funding new exit debt of
approximately US$762.5 million in the form of new U.S. dollar
denominated Notes. As a result of the Plan and related
transactions, the Company gained access to approximately
US$1,500,000,000 dollars in new capital.
Pursuant to the resolution of the Shareholders Meetings, a new
Board of Directors has been formed that is comprised of a majority
of Mexican nationals and independent members in full compliance
with Mexican foreign investment law and regulations, along with the
continued participation of existing Mexican controlling investors,
the Chairman of the Board, Javier Arrigunaga, and the CEO, Andres
Conesa.
"Today is an incredibly exciting day for Aeromexico and we are
ready to soar to new heights as we emerge from Chapter 11. We look
forward to starting a new chapter in our Company's history, backed
by a sound financial base, solid capital structure, and investors
who have full confidence in our future. Thanks to the dedication
of the entire talented Aeromexico family, as well as the support,
trust, and empathy of our customers, unions, authorities,
suppliers, and business partners, we have successfully completed
this process. As we move forward, we will not only continue to
streamline our Company to become even more sustainable, resilient,
and competitive, but we will also significantly expand our network
and fleet -- all while offering excellent service and maintaining
our position as Mexico's flagship airline", said Mr. Conesa.
Throughout the restructuring process, Aeromexico has worked to
expand its operations sustainably, opening six new routes,
restarting service on more than 30, and increasing its total seat
offering by more than 320% compared to June 2020 figures. The
Company currently flies 84 national and international routes,
connecting bustling cities in Mexico, such as Guadalajara and
Monterrey, to the European market through Madrid. In 2022,
Aeromexico plans to continue building on this momentum, including
the restart of services to London.
Since 2021, Aeromexico has received 31 airplanes and expects to
receive 22 more over the course of 2022. At the end of this year,
the Company expects to have a fleet of 145 aircraft with an average
age of seven years.
Aeromexico is planning to invest approximately US$5,000,000,000
dollars over the next five years in fleet and customer experience
improvements allowing the Company to maintain its state-of-the-art
service.
Aeromexico will continue serving customers, honoring milestone
program, restarting service on certain international routes and
opening new routes, while continuing to comply with strict
protocols to protect the health and safety of employees and
customers. Aeromexico continues operating in full observance of
all applicable Mexican laws and requirements under public
concessions granted by the Federal Government, controlled by
Mexican investors.
The parties under the Plan of Reorganization, the investors and any
third party, continue, and will continue, to have full access to,
and knowledge of, all key documents and milestones relating to the
Chapter 11 restructuring proceeding, information that is available
in previous relevant events issued by Aeromexico, and particularly
in the public docket and public documents of our voluntary
restructuring proceeding (https://dm.epiq11.com/case/aem/dockets).
About Grupo Aeromexico
Grupo Aeromexico, S.A.B. de C.V. (BMV: AEROMEX) --
https://www.aeromexico.com/ -- is a holding company whose
subsidiaries are engaged in commercial aviation in Mexico and the
promotion of passenger loyalty programs. Aeromexico, Mexico's
global airline, has its main hub at Terminal 2 at the Mexico City
International Airport. Its destinations network features the United
States, Canada, Central America, South America, Asia and Europe.
Grupo Aeromexico and three of its subsidiaries sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30,
2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker,
the Debtors reported consolidated assets and liabilities of $1
billion to $10 billion.
The Debtors tapped Davis Polk and Wardell LLP as their bankruptcy
counsel, KPMG Cardenas Dosal S.C. as auditor, and Rothschild & Co
US Inc. and Rothschild & Co Mexico S.A. de C.V. as financial
advisor and investment banker. White & Case LLP, Cervantes Sainz
S.C. and De la Vega & Martinez Rojas, S.C., serve as the Debtors'
special counsel. Epiq Corporate Restructuring, LLC, is the claims
and administrative agent.
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors on July 13, 2020. The committee is represented
by Willkie Farr & Gallagher, LLP and Morrison & Foerster, LLP.
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P E R U
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[*] PERU: Expected to Receive 1.5 Million Foreign Tourists by 2022
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Rio Times Online reports that the reactivation of the tourism
sector continues and it is expected that the number of foreign
visitors to Peru will increase this year, considering that in 2020
and 2021 the pandemic and health restrictions affected tourism
worldwide.
"For 2022, we expect to reach at least 1.5 million foreign
tourists, which is a reasonable target," the director of Peru's
Association of Incoming and Domestic Tour Operators (Apotur),
Claudia Medina, told Andina Canal Online's "TuristeANDO" program,
according to Rio Times Online.
Visitors spend an average of US$950, the report notes.
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P U E R T O R I C O
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[*] Puerto Rico Bankruptcy Filings Decreased 21% in February 2022
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Michelle Kantrow-Varzquez of News Is My Business reports that
bankruptcy filings in Puerto Rico was down 21% in February 2022.
The number of bankruptcy petitions filed by companies and
individuals in Puerto Rico during the month of February 2022 were
down 21% when compared to the same month in 2021, according to
information released by research firm Boleton de Puerto Rico.
Last January 2022, a total of 295 cases were filed at the US
Bankruptcy Court, compared to 374 cases on record for February
2021.
During the first two months of 2022, a total of 549 cases have been
filed, representing a 16.6% drop when compared to the prior year.
Of those accrued cases, the report shows that Chapter 13 personal
reorganization cases prevailed, with 346 cases on file under that
category. That represents a 8.7% drop when compared to the 379
cases on record for the same two month-period in 2021.
Meanwhile, Chapter 7 total liquidation cases reached 197 for the
two months, representing a 27.3% year-over-year drop, from the 271
cases on record for 2021, the report shows.
Next came Chapter 11 reorganization filings, with five cases on
record for the two months in 2022, which is down 16.7% when
compared to January-February 2021, when six cases were filed.
In the last category, Chapter 12 -- a category reserved for
agricultural businesses -- there was one case filed in
January-February 2022, down by 50% from the two cases filed during
the first two months of 2021.
There were five petitions filed reporting nearly $13 million in
debt, in the areas of food manufacturing, podiatry, real estate,
hardware stores and restaurants. A total of 38 businesses filed for
some sort of bankruptcy protection during the two-month period.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2022. All rights reserved. ISSN 1529-2746.
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