/raid1/www/Hosts/bankrupt/TCRLA_Public/240220.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
Tuesday, February 20, 2024, Vol. 25, No. 37
Headlines
A R G E N T I N A
ARGENTINA: Milei Hails Deceleration as Inflation Rate Exceeds 250%
B R A Z I L
ANDRADE GUTIERREZ: Fitch Affirms 'CCC-' LongTerm IDRs
ATLAS LITHIUM: Board Schedules Annual Meeting for May 28
BRAZIL: Belo Horizonte Acts Against Dengue Surge
GOL LINHAS: BNY Mellon Appointed as New Committee Member
J A M A I C A
[*] JAMAICA: Continues Expansion of Jamaica Business Gateway
[*] JAMAICA: To Formalize Deal to Become Tourism Training Center
M E X I C O
LA FAMILIA: Court OKs Cash Collateral Access
P A R A G U A Y
FRIGORIFICO CONCEPCION: Fitch Rates USD300MM Secured Bonds 'B+'
P E R U
RUTAS DE LIMA: S&P Keeps 'B-' ICR on CreditWatch Negative
V E N E Z U E L A
VENEZUELA: Has Success in Combating Hunger in 2023
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A R G E N T I N A
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ARGENTINA: Milei Hails Deceleration as Inflation Rate Exceeds 250%
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Buenos Aires Times reports that resident Javier Milei and Economy
Minister Luis Caputo have expressed satisfaction with the news that
inflation is slowing in Argentina, despite consumer prices having
soared by more than 46 percent over the last two months.
Monthly inflation decelerated in January to 20.6 percent, but
prices rose 254 percent year-on-year, the INDEC national statistics
bureau reported, the report notes.
Milei, who expressed his dismay at the "horrifying" annual rate,
warned that Argentina's inflation woes were far from over when he
took office in December, riding a wave of fury over decades of
economic mismanagement, the report relays.
He doubled down on his policies, the report discloses.
"If one takes the number alone, isolated, it is horrifying. And
indeed it is, but you have to look at where we were and what the
trend was," Milei told the LN+ television news channel.
"Inflation has begun a process of deceleration," the head of state
argued, saying that it had "been travelling at 50 [percent] per
month" and is now "at the level of 15 [percent], and continues to
fall," he added.
The report relays that December's inflation was 25.5 percent with
an annualised rate of 211 percent.
Presidential Spokesperson Maneul Adorni said the government is
"very enthusiastic" over the INDEC report, while adding that
"clearly there is still a long way to go," the report notes.
In a statement issued by the Economy Ministry, Caputo hailed the
"path of deceleration" that he claimed "has been observed since
mid-December," the report discloses.
He said the high rate recorded in January "still has an implicit
high statistical drag from December, derived from the inherited
monetary overhang and relative price corrections in the first week
of the current administration," the report notes.
Not all experts were quite as positive, the report relays.
"There is little to celebrate with inflation at these levels,
especially because in December wages fell below nine percent and in
January were closer to 15 percent, below inflation," said economist
Hernán Letcher, the report relays.
Most private estimates had expected the figure to come in between
18 and 23 percent, the report notes.
High Hikes
The items recording the highest increases in January were
miscellaneous goods and services, which rose 44.4 percent month-to
month, mostly as a result of personal care items, the report
relays.
Large hikes were also seen in transport (26.3 percent),
communication (25.1 percent), and food and non-alcoholic beverages
(20.4 percent), according to INDEC's data, the report discloses.
Leading the former were public transport hikes, following the
removal of subsidies, and rising fuel costs, the report relays.
The two divisions that registered the lowest variations in January
were clothing and footwear (11.9 percent) and education (0.9
percent). Schools are currently off-term, the report notes.
Regionally, Patagonia recorded the highest price hikes, 24.2
percent in January, with the lowest variation seen in the northeast
(19.5 percent), the report relays.
The difficult situation is forcing many in Argentina to cut back on
essential items, the report notes. According to INDEC, a kilo of
bread now costs 1,214 pesos (roughly US$1.30 at the official
exchange rate), while a litre of milk cost 842 pesos (US$0.95), the
report relays.
"Some things I ate before I don't eat now, like cheese and meat,"
Elsa Gonzalez, a 74-year-old retiree, said as she shopped in Buenos
Aires, the report notes.
Some are even forgoing medical care. Healthcare soared 20.55
percent last month, the report relays.
"With daily medications, now I have to take half a pill or less
than before because of the price," said Ramon Zamudio, 70, who
cleans and takes care of a building in downtown Buenos Aires, the
report notes.
According to INDEC, the basic food basket for a family of four to
avoid living in extreme poverty is 285,561 pesos (around
US$324.50). In order not to be considered poor, the same household
would need 596.823 pesos (US$674.70), the report relays.
More than 40 percent of the population lives in poverty, according
to INDEC data published in the latter half of 2023, the report
recalls.
Sweeping Changes
Argentina continues to be in the grip of a deep economic crisis,
with several international agencies forecasting that the country
will enter recession this year, the report relays.
Milei too has followed that line, warning that the situation will
get worse before it improves, the report relays. Nevertheless, he
is confident his "shock" treatment will pay off, the report
discloses.
The La Libertad Avanza began his term by devaluing the peso by more
than 50 percent, slashing transport and fuel subsidies, and getting
rid of price controls, the report relays.
The president declared that "economic activity would have fallen
much more" had he not implemented the new policies and that poverty
would come to affect 90 percent of the population, the report
notes.
"We are focusing on taking care of the most vulnerable class,"
Milei claimed, while detailing increases in social allowances, the
report relays.
Milei has estimated that inflation would come under control within
two years. But the 53-year-old libertarian and self-described
"anarcho-capitalist" is however struggling to get his reforms
through Congress, where his party is firmly in the minority, the
report notes.
After marathon debates, his flagship 'omnibus bill' reform package
- which touches on many areas of public and private life, from
privatisations to cultural issues, the penal code, divorce and the
status of football clubs - was watered down and eventually sent
back to committee for a rewrite, the report discloses.
But in a symbol of support for Milei's reforms, the International
Monetary Fund in late January issued a fresh disbursement of US$4.7
billion in funds, as part of Argentina's US$44-billion aid program,
the report notes.
The report relays that International Monetary Fund chief Kristalina
Georgieva at the time praised Milei government's "bold actions to
restore macroeconomic stability and . . . address long-standing
impediments to growth."
The Organisation for Economic Cooperation and Development (OECD)
said it expects Argentina's economy to shrink by 2.3 percent this
year, the report notes. The IMF predicts a deeper contraction of
2.8 percent, the report relays.
At 20.6 percent, monthly inflation remains close to Argentina's
historical record of 27 percent registered in February 1991, the
report recalls.
In the Central Bank's latest market expectations survey, experts
forecast that inflation will continue to slow in the coming months,
reaching 15.3 percent in March and 13 percent in April, the report
says.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez 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.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on June 13, 2023, raised its local currency
sovereign credit ratings on Argentina to 'CCC-/C' from 'SD/SD' and
0its 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.
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B R A Z I L
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ANDRADE GUTIERREZ: Fitch Affirms 'CCC-' LongTerm IDRs
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Fitch Ratings has affirmed Andrade Gutierrez Engenharia S.A.'s
(AGE) Foreign and Local Currency Long-Term Issuer Default Ratings
(IDRs) at 'CCC-' and Andrade Gutierrez International S.A.'s (AGI)
2029 and 2040 senior secured notes at 'CCC-'/'RR4' and 'C'/'RR6',
respectively, which are unconditionally and irrevocably guaranteed
by AGE and affiliates. Fitch has downgraded the National Scale
long-term rating to 'CCC-(bra)' from 'CCC(bra)' to align the local
rating to the IDR, as now the National Scale rating in the
'CCC(bra)' level has modifiers.
AGE's ratings reflect high credit risk due to several challenges
the company still faces in attempting to turnaround operations,
recover backlog and improve operational cash flow generation and
liquidity. The contractor's financial flexibility to support
operations and service debt and the fines of plea bargain
agreements remains weak, amid a scenario of restricted access to
credit lines and strong dependence on closure of new contracts. The
company's cash position of about BRL270 million is weak to support
debt amortizations, coupon payments, fines from the lenience
agreement and other obligations of about BRL430 million during
2024, while FCF is expected to remain negative.
KEY RATING DRIVERS
Weak Financial Flexibility: AGE's financial flexibility to support
operations and service debt and the fines of plea bargain
agreements remains limited. The company has about BRL430 million of
debt amortizations, coupon payments, fines from the lenience
agreement and other obligations during 2024, while FCF is projected
negative around BRL20 million. AGE has semiannual coupon payments
of about USD20 million, due each June and December. As of September
2023, pro forma cash position was BRL271 million and short-term
debt was BRL531 million. AGE is expected to continue financing the
execution of contracts with short-term working capital lines.
Relevant Turnaround Challenges Remain: AGE faces relevant
challenges to turnaround operations and recover backlog in order to
improve overall credit quality. AGE closed 2023 with a backlog of
approximately BRL11 billion, as per Fitch's estimates, which is
slightly above 2022's BRL10 billion backlog. AGE successfully
signed a net value of about BRL4 billion in new contracts in 2023
and has the challenge to continue winning new infrastructure bids.
FCF to Remain Negative: AGE's operational cash flow generation
remains weak and recovery is slower than anticipated. Fitch
projects near break-even EBITDA in 2023 and approximately BRL200
million in 2024, as the company accelerates the execution of its
contracts and manages to dilute fixed costs. FCF, however, should
remain negative around BRL100 million per year over 2023-2025,
mainly pressured by fines and the increase in coupon payments with
the end of the flexibility to PIK the payments as of January 2024.
Weak Capital Structure: AGE is likely to maintain a weak capital
structure over the next three years, with net leverage around 15x
in 2024 and 13x in 2025. Fitch forecasts net debt around BRL3.3
billion in December 2023 and 2024. Following the sale of CCR's
shares, the company was able to pay down approximately BRL1 billion
in bonds and Andrade Gutierrez Participações S.A. (AGPar) paid
down approximately BRL2.2 billion of debt and the remaining
debenture of BRL305 million, due in 2031, is scheduled to be
serviced by AGE.
High Foreign Exchange Exposure: AGE is exposed to foreign exchange
risks, as about 70% of total debt, including AGI's bonds, are
denominated in foreign currency, while hard currency revenue
averaged 26% in the first nine months of 2023. Foreign activities
are expected to increase to 40% of revenues in by 2025 as the pace
of the execution of projects abroad increases. AGI's bonds and
coupons are not hedged.
DERIVATION SUMMARY
AGE's credit profile is commensurate with local peer OEC S.A.
(CCC-), which managed to restructure its bonds in March 2021. Both
companies have weak financial flexibility and face challenges in
recovering backlog, improving EBITDA generation and reducing
leverage to more sustainable levels.
KEY ASSUMPTIONS
- Backlog of BRL11 billion in 2023 and BRL12 billion in 2024;
- Average conversion ratios of four years in 2023 and 2024, leading
to net revenue of BRL2.7 billion and BRL2.9 billion, respectively;
- Capex of BRL133 million in 2023 and BRL88 million in 2024;
- No dividend distribution in the foreseeable future.
RECOVERY ANALYSIS
The recovery analysis assumes AGE would be reorganized as a going
concern in bankruptcy rather than liquidated. Fitch assumes a 10%
administrative claim.
- AGE's going concern EBITDA is BRL200 million, reflecting the 2024
revenue forecast of approximately BRL2.7 billion, plus dividends
received from nonconsolidated investments of BRL22 million. The
EBITDA forecast still reflects limited backlog growth and the lack
of cost dilution;
- Fitch considers no gains from the potential collection of
past-due receivables and legal claims, as they would distort
recurring EBITDA;
- A 5x enterprise value multiple is used to calculate a
post-reorganization valuation, in line with the industry's
historical multiples;
- The approach considers the 2040 notes subordinated to the 2029.
Liquidation Value Approach: Fitch excluded this method because
Brazilian bankruptcy law tends to favor the maintenance of a
business to preserve direct and indirect jobs. Moreover, in extreme
cases in which liquidation has been necessary, asset recovery has
been very difficult for creditors.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Sustainable cash flow generation improvement above Fitch's
expectations.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Failure to monetize backlog and generate positive operating cash
flow;
- The beginning of a default or default-like process, such as
entering into a cure-period or standstill;
- The announcement of debt restructuring.
LIQUIDITY AND DEBT STRUCTURE
Weak Financial Flexibility: AGE's liquidity is expected to remain
weak as access to new long-term credit lines is restricted and will
depend on the company's ability to turn around operations. AGE is
expected to continue financing the execution of contracts mainly
with short-term working capital lines. Pro forma cash position as
of Sept. 30, 2023 was BRL271 million and short-term debt was BRL531
million, mostly composed of working capital lines that are expected
to be refinanced.
AGE's pro forma debt of BRL3.7 billion mainly consists of AGI's
USD414 million bond due 2029 and USD64 million bond due 2040 (64%
of total debt), debentures with AGPar due to the sale of CCR (19%),
working capital lines (9%), CONSAG's debt (7%), and permanent asset
loans and others (1%). After the debt restructuring at the end of
2022, AGPar remained with its first debenture issuance of
approximately BRL300 million due in 2031.
ISSUER PROFILE
Brazilian-based AGE is the engineering & construction unit of the
ultimate parent Andrade Gutierrez S.A. (AGSA), one of the largest
infrastructure groups in Brazil. AGE operates in Latin America,
Europe and Africa and had a backlog of BRL11 billion in September
2023, considering affiliates Consag's and Inzag's projects.
The group uses Andrade Gutierrez International S.A. (AGI) as an
investment vehicle for bond issuances that are fully and
irrevocably guaranteed by AGE and other affiliates. AGSA also
counts with an investment branch, spearheaded by AGPar, which owns
a stake in an arena and in a distributed generation company that
uses solar panels.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch uses proforma results that include all guarantors of AGI's
senior secured bonds.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Andrade Gutierrez
Engenharia S.A. LT IDR CCC- Affirmed CCC-
LC LT IDR CCC- Affirmed CCC-
Natl LT CCC-(bra) Downgrade CCC(bra)
Andrade Gutierrez
International S.A.
senior secured LT CCC- Affirmed RR4 CCC-
senior secured LT C Affirmed RR6 C
ATLAS LITHIUM: Board Schedules Annual Meeting for May 28
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Atlas Lithium Corporation disclosed in a Form 8-K filed with the
Securities and Exchange Commission that the Board of Directors of
Atlas Lithium established May 28, 2024, as the date of the
Corporation's 2024 Annual Meeting of Stockholders.
Stockholders of record at the close of business on April 1, 2024,
will be entitled to notice of and to vote at the Annual Meeting and
adjournments or postponements thereof. The time, location and
matters to be voted on at the Annual Meeting will be as set forth
in the Corporation's proxy statement for the Annual Meeting filed
with the U.S. SEC prior to the Annual Meeting.
Stockholders who wish to have a proposal considered for inclusion
in the Corporation's proxy materials for the Annual Meeting
pursuant to Rule 14a-8 under the Securities Exchange Act of 1934,
as amended, must ensure that such proposal is received by the
Corporation at its principal executive office at Rua Buenos Aires,
10, 14th Floor, Sion, Belo Horizonte, Minas Gerais, Brazil,
30.315-570, on or before the close of business on March 15, 2024,
which the Corporation has determined to be a reasonable time before
it expects to begin printing and sending its proxy materials for
the Annual Meeting.
In addition, to be considered timely under the advance notice
provisions of the Corporation's Second Amended and Restated Bylaws,
any stockholder who intends to bring business before the Annual
Meeting outside of Rule 14a-8 or nominate a person for election as
a director must ensure that written notice of such proposal or
nomination (including all information specified in the Bylaws) is
received the Corporation at the address specified above no later
than the close of business on Feb. 22, 2024.
About Atlas Lithium
Atlas Lithium Corporations formerly Brazil Minerals, Inc. is a
mineral exploration and development company with lithium projects
and exploration properties in other critical and battery minerals,
including nickel, rare earths, graphite, and titanium, to power the
increased demand for electrification. The Company's current focus
is on developing its hard-rock lithium project located in Minas
Gerais State in Brazil at a well-known, premier pegmatitic district
in Brazil. The Company intends to produce and sell lithium
concentrate, a key ingredient for the global battery supply chain.
Atlas Lithium reported a net loss of $5.66 million in 2022, a net
loss of $4.03 million in 2021, a net loss of $1.55 million in 2020,
a net loss of $2.08 million in 2019, a net loss of $1.85 million in
2018, a net loss of $1.89 million in 2017, a net loss of $1.74
million in 2016, and a net loss of $1.88 million in 2015. For the
nine months ended Sept. 30, 2023, the Company reported a net loss
of $25.60 million.
Atlas Lithium stated in its Quarterly Report for the period ended
Sept. 30, 2023, that "Our future short- and long-term capital
requirements will depend on several factors, including but not
limited to, the rate of our growth, our ability to identify areas
for mineral exploration and the economic potential of such areas,
the exploration and other drilling campaigns needed to verify and
expand our mineral resources, the types of processing facilities we
would need to install to obtain commercial-ready products, and the
ability to attract talent to manage our different business
activities. To the extent that our current resources are
insufficient to satisfy our cash requirements, we may need to seek
additional equity or debt financing. If the needed financing is
not available, or if the terms of financing are less desirable than
we expect, we may be forced to scale back our existing operations
and growth plans, which could have an adverse impact on our
business and financial prospects and could raise substantial doubt
about our ability to continue as a going concern."
BRAZIL: Belo Horizonte Acts Against Dengue Surge
------------------------------------------------
Rio Times Online reports that Belo Horizonte, a major Brazilian
city, declared a health crisis due to rising dengue cases and
related illnesses. This move targets the epidemic's spread,
according to Rio Times Online.
For six months, efforts to curb these illnesses will intensify,
with Mayor Fuad Noman leading the charge, the report relays. His
declaration appeared in the official city record, the report
notes.
Nationally, dengue claimed 94 lives in 2024, with 381 more deaths
pending investigation, the report discloses.
The local Health Department now must craft and enforce emergency
response plans, the report relays. This includes creating
additional rules as needed, 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).
GOL LINHAS: BNY Mellon Appointed as New Committee Member
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The U.S. Trustee for Region 2 appointed The Bank of New York Mellon
as new member of the official committee of unsecured creditors in
the Chapter 11 cases of GOL Linhas Aereas Inteligentes S.A. and its
affiliates.
As of Feb. 13, the members of the committee are:
1. SMBC Aviation Capital Limited
IFSC House, IFSC
Dublin 1, Ireland
Attn: Shane Matthews
Tel: 353 1 859 9000
shane.matthews@smbc.aero
2. WWTAI AirOpCo II DAC
c/o FTAI Aviation LLC
415 West 13th St., 7th Fl.
New York, NY 10014
Attn: Stacy Kuperus, Chief Portfolio Officer
Tel: 332 239 7604
skuperus@ftaiaviation.com
3. Genesis Aircraft Services Limited
7th Floor Block I, Central Park,
Leopardstown, Dublin 18, D18 HCP5, Ireland
Attn: Anna Reimers, Chief Legal Officer
Tel: +353 1 525 0999
areimers@genesis.aero
4. Honeywell International
855 S. Mint St.
Charlotte, NC 28202
Attn: Dieter Hase, Assistant Treasurer
Tel: 980 326 9337
dieter.hase@honeywell.com
5. Inframerica Concessionaria do Aeroporto de Brasilia S.A.
Area especial s/n. Lago Sul, Brasilia, Distrito Federal
Brasil, CEP 71608-900
Attn: Valter Barcellos Costa, Legal Officer
Tel: +55 61 3214-6932
vcosta@inframerica.aero
6. Sindicato Nacional dos Aeronautas (SNA)
Brazil, Sao Paulo SP
Rua Barao de Goiania, n#76
Congonhas 04612-020
Attn: Henrique Hacklaender, President
Tel: +55 11 5090-5100
presidencia@aeronautas.org.br
7. The Bank of New York Mellon
Corporate Trust – Default Administration Group
240 Greenwich Street
New York, NY 10286
Attn: Alex Chang, Vice-President
Tel: 212-815-2816
alex.chang@bnymellon.com
About Gol Linhas
GOL Linhas Aereas Inteligentes S.A. provides scheduled and
non-scheduled air transportation services for passengers and cargo;
and maintenance services for aircraft and components in Brazil and
internationally. The company offers Smiles, a frequent-flyer
program to approximately 20.5 million members, allowing clients to
accumulate and redeem miles. It operates a fleet of 146 Boeing 737
aircraft with 674 daily flights. The company was founded in 2000
and is headquartered in Sao Paulo, Brazil.
GOL Linhas Aereas Inteligentes and its affiliates and subsidiaries
voluntarily filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 24-10118) on Jan. 25, 2024. As of the bankruptcy filing,
the Debtors estimated $1 billion to $10 billion in both assets and
liabilities.
Judge Martin Glenn oversees the cases.
The Debtors tapped Milbank, LLP as bankruptcy counsel; Seabury
Securities, LLC as restructuring advisor, financial advisor and
investment banker; Alixpartners, LLP as financial advisor; and
Hughes Hubbard & Reed, LLP as aviation counsel. Kroll
Restructuring Administration, LLC is the claims agent.
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
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J A M A I C A
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[*] JAMAICA: Continues Expansion of Jamaica Business Gateway
------------------------------------------------------------
RJR News reports that the Jamaican Government is seeking to
increase the number of transactions through the Jamaica Business
Gateway.
Twenty-nine additional processes will be added by the end of June,
according to RJR News.
The Business-to-Government (B2G) transaction platform, was launched
in May 2023 with 14 government processes for businesses to access
information and submit applications, the report relays.
The aim is to increase ease of doing business and productivity, the
report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea.
Jamaica is an upper-middle income country with an economy heavily
dependent on tourism. Other major sectors of the Jamaican economy
include agriculture, mining, manufacturing, petroleum refining,
financial and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction. The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
[*] JAMAICA: To Formalize Deal to Become Tourism Training Center
----------------------------------------------------------------
RJR News reports that Jamaica is to benefit from additional support
for training in the tourism industry.
Tourism Minister Edmund Bartlett said the government is looking to
formalise an agreement with UN Tourism (formerly UN WTO), which
could see the country becoming a training destination, according to
RJR News.
"The executive director of the UN Tourism is here and she is going
to be having discussions with JCTI (Jamaica Centre of Tourism
Innovation), with HEART and with Sandals University and a number of
other players in the human capital development segment to create,
in the end, a tourism academy that would be of a regional character
and located here in Jamaica," said Mr. Bartlett, the report notes.
Secretary General of UN Tourism Zurab Pololikashvili said Jamaica
has distinguished itself as a global tourism destination,
therefore, there would be no better place to create "the best
University of Tourism in the world and best educational centre in
the world," the report adds.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea.
Jamaica is an upper-middle income country with an economy heavily
dependent on tourism. Other major sectors of the Jamaican economy
include agriculture, mining, manufacturing, petroleum refining,
financial and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable. The upgrade of Jamaica's
rating to B1 reflects the government's sustained commitment to
fiscal consolidation and debt reduction. The positive outlook
reflects Moody's assessment that a continuation of the favorable
fiscal trajectory will further increase Jamaica's credit
resilience.
S&P Global Ratings raised on September 13, 2023, its long-term
foreign and local currency sovereign credit ratings on Jamaica to
'BB-' from 'B+', and affirmed its short-term foreign and local
currency sovereign credit ratings at 'B'. The stable outlook
reflects S&P's expectation that the government will remain
committed to prudent fiscal policies and reducing debt, as well as
supportive economic policies including a flexible exchange rate
regime and effective monetary policy.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is
Stable.
===========
M E X I C O
===========
LA FAMILIA: Court OKs Cash Collateral Access
--------------------------------------------
The U.S. Bankruptcy Court for the District of Mexico authorized La
Familia Primary Care, P.C. to use cash collateral in accordance
with the budget, with a 10% variance.
As of the Petition Date, the Debtor may be indebted to Bankers
Healthcare Group, LLC pursuant to certain loan documents.
Pursuant to the BHG Prepetition Loan Documents, the Debtor may have
granted BHG security interests in property of the Debtor that
includes accounts receivable, accounts or other cash collateral.
As of the Petition Date, the Debtor may be indebted to the United
States Small Business Administration pursuant to EIDL loan
documents, including a UCC Financing Statement filed with the NMSOS
on May 15, 2020.
Pursuant to the SBA Prepetition Loan Documents, the Debtor may have
granted the SBA security interests in the Prepetition Collateral,
which is inferior to the security interests of BHG. Pursuant to 11
U.S.C. section 363(c), the Debtor seeks the use of the Prepetition
Collateral constituting cash collateral in the manner provided for
in the Order.
The Debtor is permitted to use cash collateral for only the
expenses approved by the Order, listed in the budget, or to which
additional expenses BHG, the SBA, and the Debtor mutually agree in
their respective sole discretion.
As adequate protection to BHG and the SBA, the Debtor grants BHG
and the SBA replacement liens in an amount equal to and in the same
priority as they had as of the Petition Date to the extent that
each had a properly perfected security interest in cash collateral
as of the Petition Date.
The Debtor is also authorized to make monthly cash payments to BHG
in the amount of $2,338, and to the SBA in the amount of $175, as
shown in the budget. The Debtor will pay immediately when due all
personal property taxes that accrue post-petition. The Debtor will
maintain general business, liability, and malpractice coverage and
will continue to maintain and protect all Prepetition Collateral
consistent with the BHG and SBA Prepetition Loan Documents.
The Order will remain in effect until the first of: (1) the last
date set forth on the Third Budget (June 30, 2024); (2) upon the
Effective Date of a confirmed plan; or (3) upon entry of an order
amending or superseding the Order.
A copy of the court's order is available at:
https://urlcurt.com/u?l=cRu4Tb from PacerMonitor.com.
About La Familia Primary Care, P.C.
La Familia Primary Care, P.C. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. N.M. Case No. 23-10566-t11) on
July 19, 2023. In the petition signed by Misbah Zmily, president,
the Debtor disclosed up to $500,000 in assets and up to $10 million
in liabilities.
Judge David T. Thuma oversees the case.
Shay Meagle, Esq., at Business Law Southwest, represents the Debtor
as legal counsel.
===============
P A R A G U A Y
===============
FRIGORIFICO CONCEPCION: Fitch Rates USD300MM Secured Bonds 'B+'
---------------------------------------------------------------
Fitch Ratings has assigned a 'B+'/'RR4' rating to Frigorifico
Concepcion S.A.'s USD300 million senior secured bonds due in 2030.
The bonds will be pari passu with the 2028 notes, and secured by
certain real estate property and equipment located in Paraguay, as
well as 50% of capital stock of its subsidiaries Frigorifico BFC
S.A. and BMG Foods S.A., which are also guarantors of the
transaction. Proceeds will be used for expansionary capex, working
capital needs, debt refinancing and will reinforce the company's
cash balance.
Fitch rates Frigorifico Concepcion's Foreign Currency (FC) and
Local Currency (LC) Issuer Default Rating (IDR) 'B+' and the USD300
million senior secured bonds due in 2028 'B+'/'RR4'. The Rating
Outlook is Stable.
The rating reflects the expectation that Frigorifico Concepcion
will strengthen its business profile by improving scale, increasing
market share, and building a solid export footprint without
materially deteriorating its capital structure. The rating also
reflects the risks of operating with moderate scale in the volatile
protein industry, mitigated by its geographical and protein
diversification and its prominent market position in Paraguay, and
increasing participation in Bolivia and Brazil's markets. It also
reflects the aggressive capex execution risk, its ongoing negative
FCF generation, and manageable liquidity.
KEY RATING DRIVERS
Export Business Model: The new bonds will help Frigorifico
Concepcion run a new expansion cycle over 2024. Along with the
expected ramp-up of its Bolivian business, the company should
expand its operations in Brazil, seeking an export market. It
should take advantage from the China's beef market combined with
the healthy international protein demand. The company's Brazilian
beef production is expected to reach around 160 million tons in
2024, an increase of about 50% compared to 2023. For 2024, Fitch
estimates around 65% of revenues will come from exports, compared
to 45% of export sales in the LTM ended in 3Q23. The company's
ability to export to China through its subsidiary in Bolivia and
the expected access to the Chinese market from its Brazilian
operations is positive, as it offset the restriction of meatpackers
in Paraguay to export to that country, given Paraguay's recognition
of Taiwan as a sovereign.
Geographical and Product Diversification: Besides the consistent
increase in export footprint, the company's business profile should
benefit from the geographical and product diversification. These
factors lower Frigorifico Concepcion's business risks as it
mitigates sourcing and exports bans inherent to the volatile
protein sector. For 2024, operations in Brazil are estimated to
represent about 50% of EBITDA, while Paraguay represents 35% and
Bolivia 15%. Complementing the beef business, pork and pork
products should represent about 10% group sales in that period.
Frigorifico Concepcion is exposed to sanitary, environmental,
deforestation and import or export restriction risks, and quotas,
which have resulted in its historically volatile performance.
EBITDA to Ramp Up: Fitch forecasts EBITDA of about USD190 million
in 2024, increasing from the expected USD170 million in 2023. The
increase is driven by the ramp-up of operations in Bolivia, the
growing slaughtering capacity and utilization rate in Brazil, and
the start-up of the pork production in Paraguay. Consolidated
volumes are expected to almost double to 634 million tons, in 2024,
from 332 million tons in 2023. The consolidated EBITDA margin is
projected at close to 10%-11% in 2024, after reaching 11.9% in 3Q23
LTM, benefited from the favorable prices in Brazil's local market,
low production costs and positive cattle cycle in South America.
FCF Pressures: The working capital requirements for the ramping-up
of production and the aggressive capex plan should put pressure on
Frigorifico Concepcion's FCF in 2023-2024. During that period, FCF
should remain negative, at BRL320 million, and reverse to positive
territory only in 2025. In 2023, the working capital consumption is
expected to be around USD210 million, driven by the working capital
cycle of 144 days, an increase from 122 days in 2022. The increase
in export-derived sales from 2024 onwards should prevent working
capital cycle from declining.
After expected capex of BRL36 million in 2023, Fitch projects capex
of about USD77 million in 2024, which includes the expansion
investment of USD30 million in INCKA, the Paraguayan unit dedicated
to the slaughter and processing of pigs that is currently under
construction, and USD40 million to increase slaughtering capacity
and utilization rates in Brazil. Execution risk is manageable as
the majority of the additional capacity comes from plants that
already exists, but material capex overruns or delays in ramping up
capacity additions could trigger negative rating actions.
Delayed Deleveraging: The new expansion cycle should delay
Frigorifico Concepcion's deleveraging trend. The company's net
leverage should be close to 3.5x in 2023 and 2024, compared with a
steady 3.0x in the previous base case scenario for the ratings. The
improvement of the company's business profile, which includes a
larger scale and improving export footprint, and the expected
ability to reach net leverage ratios limited to 3.0x from 2025
onwards are important consideration that support the bond's rating
at 'B+'.
DERIVATION SUMMARY
Frigorifico Concepcion's 'B+'/Outlook Stable rating compares
negatively with peers across the region, resulting from its smaller
scale, less geographic and protein diversification, more leveraged
capital structure, and tighter liquidity compared to peers.
Although both issuers concentrate their operations mainly in beef
and assets in South America, Frigorifico Concepcion's rating is two
notches below Minerva S.A.'s (BB/Stable) due to its significantly
lower scale. Minerva's positive FCF trends, leverage limited to
3.0x, and significantly stronger liquidity also differentiate the
ratings.
KEY ASSUMPTIONS
- Production of 335 mm tons of meat (beef and pork) in 2023 and 654
million tons in 2024;
- Average prices of export market in Brazil to increase from
USD3.7/kg in 2023 to USD4.8/kg in 2024;
- Average prices of local market in Brazil to decline from
USD5.0/kg in 2023 to USD4.9/kg in 2024;
- Average prices of export market in Paraguay to decline from
USD5.2/kg in 2023 to USD4.8/kg in 2024;
- Average prices of local market in Paraguay to remain stable at
USD3.8/kg in 2023 and 2024;
- Working capital days of 144 days in 2023 and 2024;
- Capex of USD77 million in 2024, including USD40 million in
Brazil, USD30 million in Paraguay and USD7 million of maintenance
capex; and USD10 million of maintenance capex in 2025;
- New financing of USD405 million in 2024, being USD300 million of
bonds due in 2030.
RECOVERY ANALYSIS
The recovery analysis assumes Frigorifico Concepcion would be
reorganized as a going-concern (GC) in bankruptcy rather than be
liquidated. Fitch has assumed a 10% administrative claim. The GC
EBITDA assumption of about USD200 million reflects the volatility
of the protein industry, potential sanitary risks or temporary
shutdown of any export markets.
An enterprise value (EV) multiple of 5x EBITDA is applied to the GC
EBITDA to calculate a post-reorganization EV. Fitch uses a multiple
of 5x that reflects the sector dynamics and the company's business
profile as mid-sized company with strong growth prospect and good
operating margin.
The above assumption result in a recovery rate assumption within
the 'RR1' range for the new senior secured notes. Due to the 'RR4'
cap for Brazil's corporates, Fitch limits the recovery for the
senior secured bond at 'RR4' despite a higher projected recovery.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- Debt/EBITDA below 3x on a sustained basis;
- Sustainable positive FCF;
- Maintenance of strong liquidity and elongated debt amortization
schedule.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- Debt/ EBITDA above 4.5x and Net debt/ EBITDA above 3.5x on a
sustained basis;
- Deterioration of liquidity;
- Material capex overruns or delays in ramping up capacity
additions;
- Negative FCF beyond 2025.
LIQUIDITY AND DEBT STRUCTURE
Liquidity to Improve: Fitch views Frigorifico Concepcion's current
liquidity as weak due to the historical low levels of cash and cash
equivalents compared to short-term debt. The company's financial
flexibility relies on local bank lines to refinance debt and
finance working capital of ramp-up operations. The company's
liquidity position should improve in 2024, benefiting from the
issuance of the new bond as part of the proceeds will reinforce the
company's cash balance. As of September 2023, cash on hand was
USD26 million, and short-term debt totaled about USD175 million.
Total debt was USD535 million, comprised of USD300 million secured
notes due in 2028, local notes and bank debt.
ISSUER PROFILE
Frigorifico Concepcion S.A. was founded in 1997 and is based in
Concepcion, Paraguay. The company operates as a meatpacker in
Paraguay, Bolivia and Brazil.
ESG CONSIDERATIONS
Frigorifico Concepcion has an ESG Relevance Score of '4' for
Governance Structure due to ownership concentration. The
shareholder's strong influence upon management could result in
decisions being made to the detriment of the company's creditors,
which has a negative impact on the credit profile, and is relevant
to the rating in conjunction with other factors.
Frigorifico Concepcion has an ESG Relevance Score of '4' for Waste
& Hazardous Materials Management; ecological impacts due to land
use & supply chain management as the company is exposed to cattle
sourcing and need to monitor direct and indirect suppliers in South
America and it is exposed as well the beef sector in general to
export bans which has a negative impact on the credit profile, and
is relevant to the rating[s] in conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery
----------- ------ --------
Frigorifico
Concepcion S.A.
senior secured LT B+ New Rating RR4
=======
P E R U
=======
RUTAS DE LIMA: S&P Keeps 'B-' ICR on CreditWatch Negative
---------------------------------------------------------
S&P Global Ratings kept its 'B-' issue rating on Rutas de Lima
(RdL) on CreditWatch with negative implications.
The CreditWatch negative reflects a 50% chance that S&P could lower
the rating in the next 90 days if it perceives higher risks to cash
flow generation, which could occur if the precautionary measure
isn't lifted within 90 days, or if the project receives additional
unfavorable sentences that could further hurt coverage metrics.
The Seventh Civil Court with Subspecialty in Commercial Matters of
Lima (Court of Lima) recently admitted a precautionary measure to
temporarily suspend collections at the Chillon toll plaza, located
along the Panamerica Norte (PN) road, until a final decision is
made. The suspension doesn't contemplate, at this stage, any
compensation for RdL.
S&P said, "We therefore excluded toll collections from the Chillon
plaza in our base-case scenario for 90 days (the tenor of the
CreditWatch). We also incorporated a 15% toll increase derived by
the inflation mechanism included in the concession agreement that
was implemented on Jan. 30, 2024 at Panamericana Sur (PS) and a
roughly 4% traffic increase during January. We now expect the
project to have a debt service coverage ratio (DSCR) close to 1.2x
by December 2024. Moreover, under this scenario, we don't
anticipate the project will use its reserve accounts to face
financial obligations until at least 2029."
The Court of Lima admitted a precautionary measure requested by the
Casa Huerta El Paraiso-Puente Piedra Assn. to temporarily suspend
collections at the Chillon toll plaza until a final decision is
made. Consequently, on Jan. 29, 2024, RdL suspended collections at
this plaza and appealed the Court of Lima's decision.
=================
V E N E Z U E L A
=================
VENEZUELA: Has Success in Combating Hunger in 2023
--------------------------------------------------
Juan Martinez at Rio Times Online reports that Venezuela's Minister
of Urban Agriculture, Johanna Carrillo, announced on TV a reduction
in the country's nutrition gap to 6.5% in 2023.
This marks a major improvement from the 35.6% deficit seen in 2017,
according to Rio Times Online. Carrillo pointed out that sanctions
from the United States contributed to the earlier high levels, the
report notes.
She showed that the gap decreased steadily over the years, the
report relays. It went from 11.5% in 2021 to 7.7% in 2022,
reaching 6.5% in 2023, the report notes.
This shows Venezuela is making strides in improving its citizens'
nutrition, the report says.
A special team monthly checks the population's health by measuring
weight and height, the report notes. This helps understand the
nutrition situation better, the report relays.
The government has taken steps to improve food access, the report
discloses. It set up local committees (CLAP) to boost urban
farming, the report notes.
Training families in farming and finding urban areas for
agriculture are part of the plan, the report discloses. This
effort helps increase food availability and boosts the nation's
health, the report relays.
Venezuela's Urban Farming Push
Venezuela's Urban Agriculture Ministry plans to set up 3,000 Clap
committees by 2024, the report relays.
This effort, led by Minister Jhoanna Carrillo, aims to turn cities
into green, productive spaces, the report notes.
It focuses on growing food, building community, empowering women,
and teaching sustainable farming, the report discloses.
The goal is to make urban areas like Caracas lush and fertile, the
report relays. This project will increase food access, reduce
carbon emissions, and unite people, the report notes.
It turns city spaces into farms, showing a strong commitment to
eco-friendly urban living, the report notes.
Women and young people are at the heart of this initiative, the
report discloses. They get help through a biocredit system to
start urban farms, the report notes.
The plan also includes reviving over 22,000 agro-urban centers and
setting up school gardens in 12 schools, spreading eco-awareness
among the young, the report adds.
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
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 2024. All rights reserved. ISSN 1529-2746.
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* * * End of Transmission * * *