/raid1/www/Hosts/bankrupt/TCRLA_Public/230816.mbx
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
Wednesday, August 16, 2023, Vol. 24, No. 164
Headlines
A R G E N T I N A
ARGENTINA: Devalues Currency, Jacks up Interest Rates
ARGENTINA: Poverty Bites in Greater Buenos Aires
B R A Z I L
ATVOS: Mubadala to Acquire 31.5% Stake in Company
BRAZIL: Analysts See Deeper Monetary Easing Cycle After Rate Cut
BRAZIL: IPCA Recorded Inflation of 0.12% in July
D O M I N I C A N R E P U B L I C
[*] DOMINICAN REPUBLIC: Intrant Presents Electric Mobility Benefits
P U E R T O R I C O
SAN JORGE CHILDREN'S: Unsecured Creditors to Split $875K in Plan
V E N E Z U E L A
VENEZUELA: Opposition Poised to Extend Deadline on Defaulted Bonds
- - - - -
=================
A R G E N T I N A
=================
ARGENTINA: Devalues Currency, Jacks up Interest Rates
-----------------------------------------------------
Natasha Turak, writing for CNBC, reports that Argentina's central
bank devalued its currency, the peso, by close to 18% and hiked its
benchmark interest rate by a whopping 21 percentage points to 118%
on Monday, Aug. 14, following a shock primary election win by
far-right libertarian Javier Milei.
CNBC says the moves were a bid by the government to calm markets in
the wake of the Argentinian congressman's surprise victory, which
gave him the largest share of votes in the country's presidential
primary election at roughly 30%, far exceeding forecasts.
According to the report, markets had been betting on favorable
results for moderate candidates. Argentina's presidential election
will be held in October.
Argentinian stocks and its sovereign dollar bonds were also lower
Monday, notes CNBC.
The central bank said Monday that the peso would be held at 350 to
the dollar until the October vote, adds the report.
Milei, riding on a wave of popular discontent, has vowed to get rid
of the central bank and dollarize Argentina's economy, CNBC relays.
He has also advocated for sharp spending cuts.
Milei is a vocal critic of what he calls the corrupt political
class, saying the country's leaders have thrown it from one crisis
to another, notes the report. He believes replacing the peso with
the dollar could calm inflation, but many economists warn that
would trigger financial chaos.
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.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None
of
its rated bond issues are affected.
S&P said the negative outlook on the long-term ratings is based
on
the risks surrounding pronounced economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among
the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.
Fitch Ratings also upgraded on June 13, 2023, Argentina's
Long-Term Foreign Currency (FC) Issuer Default Rating (IDR) to
'CC' from 'C' and affirmed the Long-Term Local Currency (LC) IDR
at 'CCC-'. Fitch typically does not assign Outlooks to sovereigns
with a rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a
default
event of some sort appears probable in the coming years,
regardless
of the outcome of upcoming elections. The affirmation of the LC
IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
ARGENTINA: Poverty Bites in Greater Buenos Aires
------------------------------------------------
Ludmila Di Grande at Buenos Aires Times reports that in the run-up
to the PASO primaries, the socio-economic situation in Greater
Buenos Aires is at a critical stage. Poverty, destitution,
unemployment and informal labour indicators in the region's 24
districts top the nationwide rankings, according to Buenos Aires
Times. Yet some of the hopefuls running for municipal council
seats assure that the problems raised by residents go way beyond
product shortages and never-ending price hikes, the report notes.
According to data from the INDEC national statistics bureau's
Observatorio del Conurbano Bonaerense, elaborados en base a la
Encuesta Permanente de Hogares ("Observatory of Greater Buenos
Aires based on the Permanent Household") survey, poverty reached 46
percent in the first quarter of this year, extending to 63.9
percent in those aged under 17. Nationwide these figures were
respectively 40.9 percent and 57.8 percent, the report notes.
Extreme poverty in those first three months climbed to 11.5 percent
as against 9.9 percent nationwide with youth continuing to be the
most affected at 15.2 percent, the report discloses.
Meanwhile, unemployment climbed to 8.3 percent from 7.8 percent in
the final quarter of last year, the report relays. Women (9.7
percent) and youth below the age of 24 (21 percent) were the most
affected, the report notes. For comparison, unemployment reached
6.9 percent nationwide, the report discloses.
Having a job does not guarantee an escape from poverty in the
Conurbano. Many suffer precarious conditions -informal employment
now reaches 38.7 percent, up from 35.6 percent in the last quarter
of 2022, the report says.
According to INDEC, the wages of informal workers only climbed 31.2
percent in the first five months of the year against an accumulated
inflation rate of 42.2 percent, the report notes.
Over the last 12 months, annualised inflation stands at 114.2
percent, the report says. The wages of the non-registered only
rose 77.4 percent, the report relates.
Runaway prices hit the most vulnerable sectors hardest since
"within the shopping-baskets of the 40 percent of poor households,
food averages 32 percent of consumption while for the other 60
percent of the families with higher incomes this item explains 21
percent of spending," said the Ecolatina consultancy firm in a
recent report, Buenos Aires Times discloses.
In this sense, last month's food prices continued to advance in
Greater Buenos Aires, rising 7.68 percent according to data from
the ISEPCI (Instituto de Investigacion Social, Economica y
Política Ciudadana) research institute, the report relays.
The basic food shopping-basket was evaluated at 110,079 pesos,
representing an increase of 7.64 percent from June, the report
relays. So far this year this shopping-basket has increased 71.64
percent (or more than 10 percent monthly) while in the last 12
months it has risen 118.36 percent, the report notes.
"The expectations for August have not improved with important
increases announced for meat (15-30 percent since 'lagging' behind
inflation), bus fares, petrol and other services adding to the
usual inflationary pace," assured ISEPCI, the report discloses.
At the height of the electoral campaign, the statistics show
Greater Buenos Aires to be in intensive therapy while the "doctors"
do not seem to find treatment, the report says.
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.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
its national scale rating to 'raCCC+' from 'SD'. S&P also affirmed
its 'CCC-/C' foreign currency sovereign credit ratings on
Argentina. The outlook on the long-term ratings is negative. S&P's
'CCC-' transfer and convertibility assessment is unchanged. None
of
its rated bond issues are affected.
S&P said the negative outlook on the long-term ratings is based
on
the risks surrounding pronounced economic imbalances and policy
uncertainties before and after the 2023 national elections.
Divisions within the government coalition, and infighting among
the
opposition, constrain the sovereign's ability to implement timely
changes in economic policy.
Fitch Ratings also upgraded on June 13, 2023, Argentina's
Long-Term Foreign Currency (FC) Issuer Default Rating (IDR) to
'CC' from 'C' and affirmed the Long-Term Local Currency (LC) IDR
at 'CCC-'. Fitch typically does not assign Outlooks to sovereigns
with a rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a
default
event of some sort appears probable in the coming years,
regardless
of the outcome of upcoming elections. The affirmation of the LC
IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
===========
B R A Z I L
===========
ATVOS: Mubadala to Acquire 31.5% Stake in Company
-------------------------------------------------
Marcelo Teixeira at Reuters reports that Abu Dhabi investment fund
Mubadala Capital will take an opposite direction from most of its
peers in the Brazilian sugar and ethanol industry, which it plans
to enter by early next year, betting on expanding output of the
biofuel and looking only marginally to sugar.
Bruno Serapiao, CEO of Atvos, one of the country's largest
sugarcane processors, told Reuters that a deal by the asset
management arm of UAE's investor Mubadala Investment to acquire a
31.5% stake in Atvos should happen later this year or early next
year, according to Reuters.
Atvos is currently under bankruptcy protection, and Mubadala will
pay 500 million reais ($102.83 million) when the Brazilian company
lifts its court debt protection, Serapiao said, the report notes.
Mubadala, which already entered Brazil's oil refining business in
Brazil in 2021 and is investing in renewable fuels, earlier dropped
out of bidding for ethanol joint venture BP Bunge Bioenergia, the
world's third-largest sugarcane processor, the report relays.
Several sugar and ethanol companies in Brazil are expanding
sugar-producing capacity, looking to profit from historically high
prices for the sweetener, the report notes. Prices are high due to
smaller production in some countries, the report discloses. A
second global supply deficit is expected in 2023/24, the report
says.
Serapiao, however, said that Atvos is looking to boost ethanol
production, possibly adding corn as a feedstock since most of its
mills are located in Brazil's main grain belt, the report relays.
The CEO said current high sugar prices are not sustainable, and
ethanol offers better prospects over time due to the prospect that
most emerging economies will use the biofuel as a way to cut
emissions, the report notes.
"Countries below the equator tend to use biofuels since there are
limitations on power grids for adoption of electric vehicles," he
said, the report relays. "It is nice to have an electric car in Sao
Paulo, but if you go 200 km to the countryside, you can hardly find
a charging station."
Atvos plants are equipped to make more of the fuel than sugar. Only
two of its eight mills can produce the sweetener, the report says.
It uses 85% of its sugarcane for ethanol. Seven of the plants are
located in corn-rich states, the report relays.
Serapiao said that the ongoing reorganization, with Mubadala taking
a controlling stake and banks agreeing to a 50% cut on debt as well
as extending maturity until 2043, will allow to company to recover
and resume investments, the report notes.
He said the target is to boost capacity utilization, the report
discloses. The company crushed only 22 million metric tons of
sugarcane in the 2022/23 season, out of a total installed capacity
for 30 million tons, the report adds.
BRAZIL: Analysts See Deeper Monetary Easing Cycle After Rate Cut
----------------------------------------------------------------
Bloomberg News reports that Brazil analysts cut their interest rate
forecasts for this year and next after central bankers launched a
monetary easing cycle with a bold half-a-percentage point cut.
The benchmark Selic will fall to 11.75% by December, down from the
prior estimate of 12%, according to a weekly central bank survey of
economists published August 7, notes Bloomberg News.
Analysts cut their key rate forecast for next year to 9%, the
report relays. Consumer price estimates for this year were left
unchanged at 4.84%, the report notes.
Annual inflation will slow down to 3.88% in 2024 and 3.5% in 2025,
Bloomberg News discloses. The monetary authority targets inflation
at 3.25% for this year and then 3% through 2026, the report notes.
Central bankers led by Roberto Campos Neto kicked off an easing
cycle with a bigger-than-expected rate cut to 13.25% in a split
vote, the report relays. Policymakers also signaled they intend to
carry on with reductions of 50 basis points after annual inflation
eased below their target and core price measures, which exclude
volatile items like energy and food, also improved, adds the
report.
Bloomberg News says President Luiz Inacio Lula da Silva's
government welcomed the rate cut, with Finance Minister Fernando
Haddad calling it "encouraging" and saying it leads to an
"optimistic view" of the economy. It was the first policy decision
for new board member Gabriel Galipolo, who is a Lula ally and seen
by many within the Workers' Party as Campos Neto's successor after
his term ends in 2024.
Brazil's real slumped the most since November after the borrowing
cost reduction as carry trade appeal faded, notes the report. Swap
rates fell as traders boosted bets that policymakers may accelerate
the pace of easing, the report adds.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022
Brazilian general election. He was sworn in on January 1, 2023, as
the 39th president of Brazil, succeeding Jair Bolsonaro.
Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-',
with a Stable Outlook. The upgrade reflects better-than-expected
macroeconomic and fiscal performance amid successive shocks in
recent years, proactive policies and reforms that have supported
this, and Fitch's expectation that the new government will work
toward further improvements.
In mid-June 2023, S&P Global Ratings, revised the outlook on its
long-term global scale ratings on Brazil to positive from stable.
S&P affirmed its 'BB-/B' long- and short-term foreign and local
currency sovereign credit ratings on Brazil. S&P also affirmed its
'brAAA' national scale rating, and the outlook remains stable. The
transfer and convertibility assessment remains 'BB+'. The positive
outlook reflects signs of greater certainty about stable fiscal and
monetary policy that could benefit Brazil's still-low GDP growth
prospects. Continued GDP growth plus the emerging framework for
fiscal policy could result in a smaller government debt burden than
expected, which could support monetary flexibility and sustain the
country's net external position.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term
Foreign and Local Currency - Issuer Ratings to BB from BB (low).
At the same time, DBRS Morningstar confirmed Brazil's
Short-term Foreign and Local Currency - Issuer Ratings at R-4.
The trend on all ratings is Stable.(March 2018).
BRAZIL: IPCA Recorded Inflation of 0.12% in July
------------------------------------------------
Rio Times Online reports that the Broad Consumer Price Index
(IPCA), Brazil's official inflation metric, recorded a rate of
0.12% in July.
This rate surpassed figures from the previous month (-0.08%) and
July of the prior year (-0.68%), as revealed by the Brazilian
Institute of Geography and Statistics on Aug. 11, according to Rio
Times Online.
With this, the cumulative inflation for the year stands at 2.99%.
Over 12 months, there's a price increase rate of 3.99%, exceeding
the 3.16% noted until June, the report notes.
The transportation sector chiefly drove the surge in inflation,
noting a price hike of 1.50% in July, the report adds.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022
Brazilian general election. He was sworn in on January 1, 2023, as
the 39th president of Brazil, succeeding Jair Bolsonaro.
Fitch Ratings upgraded on July 26, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) to 'BB', from 'BB-',
with a Stable Outlook. The upgrade reflects better-than-expected
macroeconomic and fiscal performance amid successive shocks in
recent years, proactive policies and reforms that have supported
this, and Fitch's expectation that the new government will work
toward further improvements.
In mid-June 2023, S&P Global Ratings, revised the outlook on its
long-term global scale ratings on Brazil to positive from stable.
S&P affirmed its 'BB-/B' long- and short-term foreign and local
currency sovereign credit ratings on Brazil. S&P also affirmed its
'brAAA' national scale rating, and the outlook remains stable. The
transfer and convertibility assessment remains 'BB+'. The positive
outlook reflects signs of greater certainty about stable fiscal and
monetary policy that could benefit Brazil's still-low GDP growth
prospects. Continued GDP growth plus the emerging framework for
fiscal policy could result in a smaller government debt burden than
expected, which could support monetary flexibility and sustain the
country's net external position.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term
Foreign and Local Currency - Issuer Ratings to BB from BB (low).
At the same time, DBRS Morningstar confirmed Brazil's
Short-term Foreign and Local Currency - Issuer Ratings at R-4.
The trend on all ratings is Stable.(March 2018).
===================================
D O M I N I C A N R E P U B L I C
===================================
[*] DOMINICAN REPUBLIC: Intrant Presents Electric Mobility Benefits
-------------------------------------------------------------------
Dominican Today reports that Hugo Beras, the Executive Director of
the National Institute of Transit and Land Transportation
(Intrant), delivered a presentation on the National Strategic Plan
for Electric Mobility, highlighting the gradual advancements that
the country has made in this area.
He shared his insights during the "Deployment of Electric Mobility"
workshop, organized by the Regional Energy Integration Commission
(CIER) in collaboration with the Regional Committee for Central
America and the Caribbean (cecacier), according to Dominican
Today.
Beras, supported by the Superintendency of Electricity of the
Dominican Republic, emphasized that the primary objective of the
National Strategic Plan for Electric Mobility, in partnership with
the Inter-American Development Bank (IDB), is to mitigate
greenhouse gas emissions, the report notes.
He also noted the significant symbolic gesture made by the
Government of Luis Abinader, who arrived at his inauguration in an
electric vehicle, sending a strong message regarding the commitment
to sustainable mobility, the report discloses.
During his presentation, Beras highlighted the notable achievements
in terms of mobility, particularly the Santo Domingo Metro and the
Cable Car system. These elements, integrated within the Integrated
Public Transport System (SITP), represent significant ecological
and sustainable accomplishments, the report notes.
Beras elaborated, "We have the cable car in Santo Domingo; The one
in Los Alcarrizos was recently inaugurated and we are strengthening
and expanding the capacity of the Metro. Additionally, in the
coming months, the Government will inaugurate the cable car and
monorail in Santiago de los Caballeros," the report discloses. He
further noted that as part of promoting electric mobility, the
government is planning to establish the country's first electric
bus corridor in the Colonial Zone. This corridor will feature a
circuit of electric buses designed to enhance sustainable
transportation, the report says.
The discourse highlighted the commitment of the Dominican Republic
to embracing electric mobility as a pivotal strategy for
environmental preservation and advancing a greener future for the
nation, the report 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 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.
On August 14, 2023, the TCR-LA reported that Moody's Investors
Service has changed the outlook on the Government of Dominican
Republic's ratings to positive from stable and affirmed the
local and foreign-currency long-term issuer and senior unsecured
ratings at Ba3.
Moody's said the key drivers for the outlook change to positive
are: (i) sustained high growth rates have enhanced the scale and
wealthclevels of the economy; and (ii) a material decline in the
government debt burden coupled with improved fiscal policy
effectiveness will support medium-term debt sustainability
The affirmation of the Ba3 ratings balances the Dominican
Republic's strong economic growth dynamics and relatively
contained
susceptibility to event risks, with a comparatively weaker fiscal
position, reflecting long-standing credit challenges which
include:
(i) a shallow revenue base compared to peers, (ii) weak debt
affordability metrics, and (iii) high exposure to foreign currency
borrowing.
S&P Global Ratings, in December 2022, raised its long-term foreign
and local currency sovereign credit ratings on the Dominican
Republic to 'BB' from 'BB-'. The outlook on the long-term ratings
is stable. S&P affirmed its 'B' short-term sovereign credit
ratings. S&P also revised its transfer and convertibility (T&C)
assessment to 'BBB-' from 'BB+'. The stable outlook reflects S&P's
expectation of continued favorable GDP growth and policy continuity
over the next 12-18
months that will likely stabilize the government's debt burden.
In February 2023, S&P said its BB ratings reflect the country's
fast-growing and resilient economy. It also incorporates the
country's historical political and social challenges in passing
structural reforms to contain fiscal deficits, despite recent
improvements in the electricity sector. The ratings are constrained
by relatively high debt, a hefty interest burden, and limited
monetary policy flexibility.
Fitch Ratings, in December 2022, affirmed the Dominican Republic's
Long-Term Foreign Currency Issuer Default Rating (IDR) at 'BB-'
with a Stable Rating Outlook.
=====================
P U E R T O R I C O
=====================
SAN JORGE CHILDREN'S: Unsecured Creditors to Split $875K in Plan
----------------------------------------------------------------
San Jorge Children's Hospital, Inc. filed with the U.S. Bankruptcy
Court for the District of Puerto Rico a Disclosure Statement for
Chapter 11 Plan dated August 7, 2023.
Debtor is a Puerto Rico for-profit corporation, that operates the
San Jorge Children & Women's Hospital in San Juan, Puerto Rico (the
"Hospital"). The Debtor is a wholly owned subsidiary of San Jorge
Children's Healthcare, Inc.
Based on operating experience and while monitoring the current
conditions present in the Puerto Rico Healthcare System, and even
after the effects of the pandemic slowly subsided, management
determined that San Jorge will not have sufficient liquidity to
satisfy all of the future financial obligations, comply with the
secured debt covenants, and execute the intended business plan to
improve operating results.
Upon evaluating the bankruptcy estate's composition and examining
the financial forecasts of the Hospital, the Debtor's management
has concluded that the sale of all of the Hospital's assets is the
reorganization strategy that would render more beneficious results
for the creditors while also ensuring the continuity of its
operations in benefit of the community it serves.
The Debtor is currently working with what it considered to be the
best proposal received to date for the sale of all or substantially
all of the assets of the Debtor that are related to the operation
of the Hospital, including the Real Property and the Personal
Property. However, regardless of the efforts employed and that
Debtor continues engaged with potential buyers, to date, no asset
purchase agreement has been executed nor stalking horse selected.
The Debtor will continue its efforts to identify a stalking horse
and execute a Conditional Asset Purchase Agreement (hereafter the
"CAPA"). In sum, the Debtor will move to confirmation under one of
three scenarios.
* First, at the conformation date, if a CAPA has been executed
with a stalking horse, and if no competing bidding is received, the
debtor will request the approval of the intended CAPA at
confirmation hearing as the authorized sale transaction being the
debtor in position to employ all efforts towards the closing and
transfer after confirmation.
* Second, at the conformation date, if a CAPA has been
executed with a stalking horse, and a competing bidding is
received, the debtor will seek the approval of the CAPA with the
identified buyer as the stalking horse as the leading bid only to
be bested after confirmation at a public auction. Under such
circumstances, the debtor will move to confirmation with CAPA and
the stalking horse as the baseline for the plan distributions.
* Finally, at confirmation, if no stalking horse has been
selected, but competing biddings are received, a public auction
will be scheduled after confirmation.
Class 3 consists of General Unsecured Claims. Each Allowed General
Unsecured Claim and of and in exchange for each Allowed General
Unsecured Claim, each such Holder shall be paid as follows:
* Free and Clear Assets Pro-Rata Dividend. Debtor has
identified unencumbered assets that it may possess and upon
confirmation will make efforts to sell them. Allowed claimants
shall receive from the Debtor distributions on the aggregate amount
of free and clear assets. Any net proceeds realized or collected by
the Debtor, after deducting necessary liquidation expenses, will be
paid pro-rata among all allowed claimants under this Class up to
the full amount of principal owed.
* Carve-Out Pro-Rata Dividend. Beginning on the effective date
of the plan allowed claimants shall receive from the Debtor
quarterly dividend payments for a period of two years from the
effective date of the Plan to be paid pro-rata among all allowed
claimants under this Class. The funds to pay this dividend shall be
from a Carve-Out on accounts receivables and any additional agreed
carveout to be obtained upon approval of the Secured Lender in
Class 1, to be distributed when collected, no less than every 90
days, to the extend there are funds available for distribution.
As of this date, the aggregate distributions to this class are
estimated at the amount of $875,000.00, subject to several
assumptions or risk factors. Class 3 is Impaired under the Plan.
Class 4 consists of any and all general unsecured claims that are
objected to by debtor before the Claims Objection Deadline. Class 4
claims are to be considered general unsecured claims potentially
entitled to the treatment provided under Class 3, but for the
qualifications set forth herein. In a good faith effort by the
Debtor to allow the bankruptcy case to move forward while allowing
the creditors to pursue the final adjudication of their claim, if
any, and in compliance with Section 502(c), the Debtor will
estimate the claims within this class in the amounts claimed as a
potential claim against the estate.
Class 5 consists of all Equity Security Interests of the Debtor.
The current stockholders of all the equity interest are Mr. Donald
R. Dizney via Dizco Properties, Inc. with a 70% interest and Mr.
David A. Dizney via Fourth Letter Inc. with a 30% interest vested
in the San Jorge Children's Healthcare, Inc., the holding company.
On the Effective Date, or as soon thereafter as reasonably
practicable, all San Jorge stock Interests will be extinguished,
and the holders of San Jorge Interests shall not receive or retain
any distribution, property, or other value on account of their
interest on the Debtor.
On the Effective Date, or as soon as reasonably practicable
thereafter, the Reorganized Debtor, shall undertake efforts for the
sale of all the Hospital's assets, including those encumbered by
the secured creditor.
A full-text copy of the Disclosure Statement dated August 7, 2023
is available at https://urlcurt.com/u?l=ZfO1dK from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Lugo Mender Group, LLC
Wigberto Lugo Mender, Esq.
Alexis A. Betancourt Vincenty, Esq.
Amarys Vellise Bolorin Solivan, Esq.
100 Carr. 165 Suite 501
Guaynabo, PR 00968-8052
Tel.: (787) 707-0404
Fax: (787) 707-0412
Email: wlugo@lugomender.com
About San Jorge Children's Hospital
San Jorge Children's Hospital, Inc. operates a hospital in San
Juan, P.R., which specializes in pediatrics.
San Jorge Children's Hospital filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case
No. 22-02630) on Sept. 1, 2022, with between $10 million and $50
million in both assets and liabilities. Edward P. Smith, chief
operating officer, signed the petition.
Judge Maria De Los Angeles Gonzalez presides over the case.
The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group,
LLC as bankruptcy counsel and Galindez, LLC as external auditor.
Cardona Jimenez Law Offices, P.S.C. represents the official
committee of unsecured creditors appointed in the Debtor's case
while RSM Puerto Rico serves as the committee's financial advisor.
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V E N E Z U E L A
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VENEZUELA: Opposition Poised to Extend Deadline on Defaulted Bonds
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Bloomberg News reports that Venezuela's opposition is finalizing an
agreement with international creditors to extend a legal deadline
on $60 billion of defaulted bonds, according to people with
knowledge of the plan.
The agreement being drafted by the opposition-led National Assembly
- which is recognized in the US as the country's legal
representative - would suspend an upcoming statute of limitations
on the debt, according to the report.
Bloomberg News relates that the assembly was scheduled to discuss
the topic last Tuesday, August 8, according to an agenda released
by their communications team that didn't give details on the
proposals. Without a deal, bondholders have said they will sue in
US courts to protect their rights to payment, potentially burying
the country in legal action that would complicate any eventual
restructuring process. The bonds have accrued roughly $30 billion
of interest since Venezuela began defaulting in 2017.
An agreement to extend the deadline would be valid until the end of
2028, one person said, notes the report. The US would need to
endorse the agreement for it to take effect. Negotiations are still
ongoing, so the terms could change.
Press officials at the State Department didn't reply to questions
from Bloomberg on whether the US government would support such a
move. Opposition representatives didn't respond to multiple
requests for comment, notes the report.
Hans Humes, head of Greylock Capital Management, a member of a
creditor committee that holds over $10 billion of the debt, said an
agreement is needed because US policy toward Venezuela has resulted
in a "legal quagmire," Bloomberg News notes. The US stopped
recognizing President Nicolas Maduro in 2019.
"It's good to know that Venezuelans across the political spectrum
realize how damaging the wave of comprehensive litigation would
be," he said, notes the report.
The government and state-owned oil company bonds trade at deeply
distressed levels, as low as 4 cents on the dollar, according to
Bloomberg News. US investors are prohibited from buying them due to
Trump-era economic sanctions against the country.
Maduro's government made a similar offer in March, offering to
suspend the statute for five years or until the US government
lifted sanctions that are preventing a debt restructuring, adds the
report.
About Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a
country on the northern coast of South America, consisting of a
continental landmass and a large number of small islands and islets
in the Caribbean sea. The capital is the city of Caracas.
Hugo Chavez was president to Venezuela from 1999 to 2013. The
Chavez presidency was plagued with challenges, which included a
2002 coup d'etat, a 2002 national strike and a 2004 recall
referendum. Nicolas Maduro was elected president in 2013 after
the death of Chavez. Maduro won a second term at the May 2018
Venezuela elections, but this result has been challenged by
countries including Argentina, Chile, Colombia, Brazil, Canada,
Germany, France and the United States who deemed it fraudulent and
moved to recognize Juan Guaido as president.
The presidencies of Chavez and Maduro have challenged Venezuela
with a socioeconomic and political crisis. It is marked by
hyperinflation, climbing hunger, poverty, disease, crime and death
rates, social unrest, corruption and emigration from the country.
Moody's has withdrawn 'C' local currency and foreign currency
ceilings for Venezuela in September 2022. Standard & Poors has
also withdrawn its 'SD/D' foreign currency sovereign credit ratings
and 'CCC-/C' local currency ratings on Venezuela in September 2021
due to lack of sufficient information. Fitch withdrew its own
'RD/C' Issuer Default Ratings on Venezuela in June 2019 due to the
imposition of U.S. sanctions on the country's government.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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