News from Brazil

Brazil Business & Economy News

In Brazil on February 10, 2012 at 1:38 pm

ECONOMY

Brazil’s government is considering a budget freeze of up to 50 billion reais ($29 billion) this year, two government sources told Reuters, an amount some analysts say is not enough to meet debt-reduction goals and bring inflation down.

BUSINESS

Brasil Travel Turismo e Participacoes SA canceled an initial public offering, citing “unfavorable” market conditions, as the operator of the country’s stock exchange says dozens of other companies are waiting for sentiment to improve to go public (Bloomberg).

AVIATION

The winning bid for the privatisation of Guarulhos, São Paulo’s main international airport, at 16.2 billion reais ($9.4 billion), was nearly 4 billion reais more than the second-highest bid, and 12.8 billion reais above the government-specified minimum. The high price raises several questions (The Economist).

Some of the world’s biggest airport operators came away empty-handed after Brazil auctioned licenses to run three of its busiest hubs. With the concessions fetching five times the minimum bid, their caution may have been wise (Bloomberg).

Embraer, the world’s third-largest planemaker, expects a modest increase in revenue this year thanks to the expansion of its defense unit, as regional-jet and executive aviation markets remain stable (Reuters).

Brazil’s aircraft manufacturer Embraer has delivered a Legacy 650 to celebrity Jackie Chan for the Chinese market. The aircraft is painted with a dragon logo (MercoPress).

American Airlines is renegotiating terms of $1.6 billion in debt owed to Brazil’s state development bank to help it emerge more rapidly from bankruptcy in the United States (Reuters).

Brazil’s busiest airport on Wednesday opened a new terminal meant to handle as many as 5 million domestic passengers a year. Infraero, the government agency that operates airports, said on its website that the 85 million real($49.4 million) terminal in Sao Paulo’s Guarulhos international airport will handle domestic flights, which account for more than 60 percent of the passengers using the airport (Business Week).

BANKING & FINANCE

BTG Pactual, the Brazilian securities firm owned by billionaire financier Andre Esteves, is buying Chilean rival Celfin Capital for about $600 million as it seeks to win more investment banking and capital market advisory business in South America (Reuters).

BTG Pactual also plans to create an investment fund of at least 3 billion reais ($1.75 billion) to tap infrastructure development in Latin America’s biggest economy (Bloomberg).

Industrial & Commercial Bank of China Ltd., the world’s biggest lender by market value, may hire 20 to 30 executives in Brazil as it expands in South America’s biggest economy (Bloomberg).

ENERGY

Brazil may have almost 17,700 megawatts of wind power in operation in 2020, more than 10 percent of the country’s anticipated total installed capacity, according to an executive with India’s Suzlon Energy Ltd. (Bloomberg).

Industrias Metalurgicas Pescarmona SA, an Argentinean wind-turbine maker, plans to build a 200 million-real wind-turbine plant in the Brazilian state of Rio Grande do Sul (Bloomberg).

Brazil’s plans to build four new nuclear power plants have been delayed by about 18 months following last year’s accident at the Fukushima Daiichi nuclear plant in Japan, an official of Brazilian state-owned nuclear power company Eletronuclear said (MarketWatch).

HIGH SPEED

Six groups have shown interest in bidding to operate Brazil’s high-speed train, which will be auctioned in October, O Estado de S. Paulo reported, citing Transport Minister Paulo Passos and Bernardo Figueiredo, director general at the country’s land transportation agency, known as ANTT (Bloomberg).

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OIL & GAS

Petrobras will pay $76.3 billion over 15 years to lease 26 deepwater oil drilling rigs from Brazil’s Sete Brasil and Cyprus’s Ocean Rig , the largest contract in the company’s history, an executive involved in the deal told Reuters.

Petrobras said it made its first petroleum discovery in an offshore subsalt area that the state-controlled oil giant is exploring under a $70 billion oil-for-stock swap deal inked in 2010 (Reuters).

Maria das Gracas Silva Foster has worked for Brazil’s state-run oil company Petrobras almost all her career. And now, after 32 years, she is set to take over the running of a company that is crucial to Brazil’s economic development (BBC).

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