/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/241004.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 Friday, October 4, 2024, Vol. 25, No. 200 Headlines B R A Z I L AZUL SA: Nears Agreement with Aircraft Lessors JBS SA: Abused US Immigrant Workers, Union Alleges OI SA: Fiber Business Receives Unique Bid J A M A I C A JAMAICA: Food & Beverage Imports Value Fell 18.4% for Jan. to May JAMAICA: Health Goods & Services Cost up 4.3% for Year to August JAMAICA: Trade Deficit Lower for First Five Months of 2024 JAMAICA: Transportation Costs up 10.3% at August X X X X X X X X LATAM: Minister Contreras Calls for Unity to Address Sargassum - - - - - =========== B R A Z I L =========== AZUL SA: Nears Agreement with Aircraft Lessors ---------------------------------------------- Rio Times Online reports that Azul Airlines is close to finalizing negotiations with aircraft lessors, a crucial step towards securing a private capital increase. The company aims to convert approximately $600 million of debt into equity, giving lessors a 20-22% stake in Azul's capital, according to Rio Times Online. This agreement is essential for bondholders to approve a new capital injection of up to $400 million, the report notes. Insiders expect the capital increase to occur by the end of October, earlier than some market skeptics anticipated, the report relays. The airline plans to use Azul Cargo, its logistics arm valued at $800 million, as collateral for the new funds, the report notes. This approach mirrors last year's negotiations involving the Tudo Azul loyalty program, the report discloses. Azul has already reached agreements with 90% of its lessors and expects to achieve 100% in the coming days, the report says. The proposed conversion would value Azul's shares at R$30, significantly higher than the current market price of R$5.10, the report relays. This arrangement aims to avoid excessive shareholder dilution, a concern that previously led to a sharp decline in Azul's stock price, the report notes. The airline industry continues to face challenges, including delayed aircraft deliveries and high fuel costs, the report relates. However, Azul's margins have returned to pre-pandemic levels, the report discloses. The company is also pursuing a R$1 billion (US$180 million) loan repayment from TAP, the Portuguese airline, amid privatization talks, the report says. Recent approval of credit lines backed by the National Civil Aviation Fund offers additional optimism. Government officials and the BNDES president have assured that approximately R$5 billion will be available to airlines this year, the report notes. This financial support could provide a much-needed boost to the sector, the report discloses. Despite stable revenue and improved EBITDA in the first half of 2024, Azul faces headwinds from currency depreciation and high interest rates, the report relays. These factors have contributed to negative free cash flow and recent credit rating downgrades by Fitch and Moody's, the report notes. As Azul navigates these challenges, the potential agreement with lessors and capital increase represent critical steps towards strengthening the company's financial position and future growth prospects, the report adds. As reported in the Troubled Company Reporter-Latin America on Sept. 26, 2024, Moody's Ratings downgraded Azul S.A. (Azul)'s corporate family rating to Caa2 from Caa1. At the same time, Moody's downgraded to Caa1 from B3 the rating of the senior secured first lien debt and to Caa2 from Caa1 rating of the senior secured debts of Azul Secured Finance LLP (Delaware), and to Caa3 from Caa2 the senior unsecured debt ratings of Azul Investments LLP. The outlook for the issuers was changed to negative from positive. JBS SA: Abused US Immigrant Workers, Union Alleges -------------------------------------------------- Gerson Freitas Jr. at Reuters reports that a labor union is calling on US authorities to investigate JBS SA over allegations of abuse and crimes against immigrant workers just as the world's largest meat producer seeks to trade its shares in the US. The United Food and Commercial Workers said workers at the JBS plant in Greeley, Colorado, have been subject to human trafficking, paying rent for squalid conditions, dangerous work conditions, threats and intimidation, according to Reuters. As many as 500 Haitian and Benin workers may have been impacted, the union said, the report notes. Some of the alleged violations were committed by a hiring manager and at least one associate who was not directly employed by the company but had direct access to the Greeley plant, according to UFCW Local 7, the report relays. The union said it has reached out to state and federal law enforcement, as well as agencies including the Department of Labor, the report says. The Brazilian meatpacker said in a statement it has put new human resources leaders in place at the facility, banned the non-employee from the plant and notified local authorities after becoming aware of the "alarming allegations," the report discloses "JBS does not charge team members or applicants for any pre-employment services, including transportation, application, pre-hire medical requirements, or housing, nor do we require them to live in any specific location," the statement said, referring to the allegations made by the union. "We also notified local authorities and will cooperate with any resulting investigation," the report notes. US meatpackers have heavily relied on immigrant workers for hard-to-fill jobs at carcass disassembling lines, in particular following labor shortages after the pandemic, the report says. Haitian refugees account for many of the new hires at the Greeley plant, according to UFCW Local 7, the report relays. The meat empire controlled by the billionaire Batista brothers is seeking approval of the Securities and Exchange Commission to trade its shares on the New York Stock Exchange, but has faced fierce opposition from environmental groups and lawmakers, the report adds. About JBS SA JBS S.A. is a Brazilian company that is a large meat processing enterprise, producing factory processed beef, chicken, salmon, pork, and also selling by-products from the processing of these meats. It is headquartered in Sao Paulo. It was founded in 1953 in Anapolis, Goias. As reported in the Troubled Company Reporter-Latin America in August 2021, S&P Global Ratings revised the global scale outlook on JBS S.A. (JBS) and its fully owned subsidiary JBS USA Lux S.A. (JBS USA) to positive from stable and affirmed its 'BB+' issuer credit rating. The recovery expectations remain unchanged, and S&P affirmed the 'BB+' ratings on the senior unsecured notes and the 'BBB' ratings on the secured term loans. OI SA: Fiber Business Receives Unique Bid ----------------------------------------- Richard Mann at Rio Times Online reports that V.tal, a neutral network operator, was the sole bidder in the second round of the auction for Oi's broadband unit, ClientCo, offering R$5.683 billion (US$1.033 billion). This auction marks a crucial step in Oi's judicial recovery process, according to the report. V.tal's proposal involves no direct cash payment, the report notes. Instead, it consists of a complex share exchange, debt forgiveness, and operator commitments, the report relays. The offer includes R$4.99 billion (US$907.27 million) in share issuance for ClientCo, the report notes. Additionally, V.tal proposes R$375 million (US$68 million) in extraconcursal credits against Oi and R$ 308 million (US$56 million) in debentures, the report discloses. This unique structure reflects the intricate financial maneuvers in the telecom industry, the report says. Oi holds a minority stake in V.tal, adding an interesting dimension to the bid, the report notes. The proposal aligns with Oi's judicial recovery plan, which now requires creditor evaluation within ten days, the report discloses. The market anticipated this outcome, the report relays. V.tal had previously committed to submitting an offer if no other interested parties emerged for Oi's fiber business, the report says. This second round follows a July auction where Ligga Telecomunicacoes bid R$1.05 billion (US$190.91 million), the report discloses. That offer fell short of the R$7.3 billion (US$1.327 billion) minimum set in Oi's recovery plan, the report relays. Oi's judicial administrators will present V.tal's offer to creditors for deliberation, the report notes. The sale aims to bolster Oi's cash reserves for fulfilling its recovery plan obligations, the report says. Initially, Ligga Telecom remained in contention for this round, the report relays. However, the Rio de Janeiro court revised its decision, removing Ligga from the auction at V.tal's request, the report notes. V.tal argued successfully that this second round differed from the first, the report says. The court agreed that Ligga's previous compliance declaration no longer applied to the new auction terms, the report adds. As reported in the Troubled Company Reporter-Latin America in August 2024, S&P Global Ratings raised its issuer credit ratings on Brazilian telecom operator Oi S.A. to 'CCC' from 'CCC-' on the global scale and to 'brB' from 'brCCC+' on the Brazil national scale and removed the ratings from CreditWatch positive. ============= J A M A I C A ============= JAMAICA: Food & Beverage Imports Value Fell 18.4% for Jan. to May ----------------------------------------------------------------- Javaughn Keyes at RJR News reports that the value of food and beverage imports for commercial use in Jamaica fell in the first five months of this year. The Statistical Institute of Jamaica released the data, as part of its International Merchandise Trade bulletin, according to RJR News. The Statistical Institute of Jamaica (STATIN), says spending on the importation of 'Food (including Beverages) Mainly for Industry' fell by 18.4 per cent, the report notes. The price tag for these imports between January and May was US$78.8 million, the report relays. STATIN says this was primarily due to lower imports of cereal and cereal preparations, along with organic chemicals, the report notes. The category 'Parts and Accessories of Capital Goods (except Transport Equipment)' however saw higher imports, the report discloses. That was up 18.3 per cent, reaching US$128.9 million, the report says. "Fuels and Lubricants" imports were worth US$777 million, a decrease of 8.2 per cent, when matched against the US$846.4 million spend in the corresponding period last year, the report relays. Expenditure on 'Other Fuels and Lubricants' decreased by 9.6 per cent, to US$459.7 million, the report notes. Imports of 'Crude Oil' amounted to US$134.5 million, 10.1 per cent below the US$149.6 million spent in the comparable 2023 period, 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. In September 2023, S&P Global Ratings raised 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', with a stable outlook. In September 2024, S&P affirmed 'BB-/B' sovereign ratings on Jamaica and revised outlook to positive. In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. JAMAICA: Health Goods & Services Cost up 4.3% for Year to August ---------------------------------------------------------------- RJR News reports that Jamaicans paid more for health related goods and services in the last year. The point-to-point rate for the year ended August was 4.3 per cent, according to RJR News. Looking at the month of August alone, there was a 0.3 per cent rise in costs associated with the 'Health' division according to STATIN, the report notes. The entity says there was a similar increase in prices for 'Medicines and Health Products,' the report relays. This was influenced mainly by higher prices for some prescription medicine and over-the-counter cough syrup, the report says. Compared to the month of July, STATIN says 'Out patient care services' increased by an average 0.3 per cent, due to increased fees for some general practitioners, the report notes. 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. In September 2023, S&P Global Ratings raised 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', with a stable outlook. In September 2024, S&P affirmed 'BB-/B' sovereign ratings on Jamaica and revised outlook to positive. In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. JAMAICA: Trade Deficit Lower for First Five Months of 2024 ---------------------------------------------------------- Javaughn Keyes at RJR News reports that Jamaica's trade deficit was lower for the first five months of 2024. The Statistical Institute of Jamaica has released the data as part of its international merchandise trade bulletin, according to RJR News. The difference between the sum earned from exports and what is spent on imports in Jamaica was US$2.23 billion, the report notes. This was down from the $2.26 billion trade deficit for January to May 2023, the report recalls. Looking at imports, Jamaica's total spend was down by 2.4 per cent, coming in at US$3.1 billion, the report notes. For the same period last year, the country spent US$3.13 billion, the report says. STATIN says this decrease was largely due to a 14 per cent fall in "Raw Materials/Intermediate Goods" imports, the report relays. The spend on "Fuels and Lubricant" products coming into the country was down 8.2 per cent, the report discloses. Meanwhile, earnings from total exports were valued at US$823.9 million, the report says. This was 5.4 per cent below the US$870.6 million earned in the similar 2023 period, the report notes. The performance was driven by a 57.7 per cent fall in the value of re-exports in the category "Mineral Fuels," the report discloses. However, domestic exports rose by 10.7 per cent to US$715 million over the five-month period, the report relays. STATIN says this was due to a 2.3 per cent increase in exports from the Manufacturing industry, and a 26.8 per cent increase in exports from the Mining and Quarrying industry, 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. In September 2023, S&P Global Ratings raised 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', with a stable outlook. In September 2024, S&P affirmed 'BB-/B' sovereign ratings on Jamaica and revised outlook to positive. In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. JAMAICA: Transportation Costs up 10.3% at August ------------------------------------------------ Javaughn Keyes at RJR News reports that Jamaicans paid more for transportation services over the last year. The Statistical Institute of Jamaica says there was an average increase of 10.3 per cent for prices in the group, for the twelve months ended August, according to RJR News. In its latest consumer price index bulletin, STATIN said for the month of August alone, those prices increased by 0.2 per cent compared to July, the report notes. This was mainly due to a 1.7 per cent decline in prices linked to the class 'Fuels and Lubricants for personal transport equipment,' the report relays. There was a fall in petrol prices month over month, the report says. STATIN says inflation in the group could have been lower, except there was an average 3.8 per cent increase in prices within the group 'Other Services in respect of personal transport equipment,' the report notes. This class was up due to higher toll rates for the north-south leg of Highway 2000, 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. In September 2023, S&P Global Ratings raised 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', with a stable outlook. In September 2024, S&P affirmed 'BB-/B' sovereign ratings on Jamaica and revised outlook to positive. In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. =============== X X X X X X X X =============== LATAM: Minister Contreras Calls for Unity to Address Sargassum -------------------------------------------------------------- Dominican Today reports that the Dominican Republic's Minister of Economy, Pável Isa Contreras, participated in an event organized by German Chancellor Olaf Scholz and Samoan Prime Minister Fiame Naomi Mata'afa, where he urged Caribbean nations to unite in tackling the growing sargassum problem. The event, focused on international climate policy, highlighted the financial challenges facing Small Island Developing States (SIDS) and discussed reforms to the global financial system, according to Dominican Today. Isa Contreras emphasized the need for enhanced cooperation among small island states to combat the environmental impact of climate change, particularly sargassum, which affects Caribbean coasts, the report notes. He thanked Germany and Samoa for organizing the meeting and acknowledged GIZ's support in aiding the Dominican Republic's energy transition and vulnerable communities, the report relays. He noted the heightened vulnerability of small island states in the face of climate change and praised the progress made with the vulnerability index, the report discloses. The minister stressed the need to link resilience-building efforts with reforms to the international financial architecture, as resilience depends heavily on access to long-term financing, the report says. He called on influential countries to drive changes in the financial system, noting that the focus should be on securing necessary financing rather than relying on aid, the report notes. ********* 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *