/raid1/www/Hosts/bankrupt/TCRLA_Public/190709.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, July 9, 2019, Vol. 20, No. 136
Headlines
A R G E N T I N A
EDELAP: La Plata Power Blackout Will Have Economic Costs
B R A Z I L
AVIANCA BRASIL: Sets Another Auction for July 10
CESP-COMPANHIA ENERGETICA: S&P Affirms 'BB-' Global Scale Rating
C O L O M B I A
NBFI CREDIVALORES: S&P Cuts LongTerm Issuer Credit Rating to 'B'
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: Looks Ahead as Cotonou Pact Expires in 2020
DOMINICAN REPUBLIC: Medina Pledges Support to Strawberry Growers
J A M A I C A
JAMAICA: Bank Records Marginal Decline in International Reserves
P U E R T O R I C O
IRMA PEREZ: Savas Buying Dorado Property for $1.6 Million
T R I N I D A D A N D T O B A G O
CL FIN'L: NEVICOTT Seeks Info on CLICO Relinquishment
CL FIN'L: Payouts in Bailout Should be Examined Closely, Judge Says
V E N E Z U E L A
VENEZUELA: Opposition to Hold Talks With Maduro Regime
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A R G E N T I N A
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EDELAP: La Plata Power Blackout Will Have Economic Costs
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Infobae reported that the June power blackout in La Plata in Buenos
Aires will have an economic costs for Edelap (Empresa Distribuidora
La Plata S.A.), the energy distributor that has the service
concession in the area. The company will have to take care of at
least 280 million pesos, if fines and compensation to the users are
to be included, the report cited.
More than 200,000 users were affected by the blackout.
In late June, Daniel Salvador, deputy governor of Buenos Aires,
announced that the Electric Power Control Agency in the Province of
Buenos Aires (OCEBA) will apply a fine of $150 million for
"deficiency in the quality of service" of Edelap, Infobae relayed.
In addition, 51,000 affected users will be exempt from paying their
June bill, the report added.
Infobae related in a separate report that due to the blackout,
Edelap could lose its electricity concession in La Plata -- the
possibility of which was noticed by the control manager of
concessions of OCEBA, Fabian Gonzalez.
The Provincial Ombudsman of Buenos Aires, Infobae added, also
requested an economic compensation for all the victims. The
Ombudsman demanded that national authorities and the same province
apply sanctions to Edelap and that an economic compensation of
$8,000 per day of court be made for private users and about $25,000
per day for commercial premises, Infobae noted.
Empresa Distribuidora La Plata S.A. (Edelap) is an Argentinean
electric power distribution company controlled by the local
entrepreneur Roberto Pagano through Desa S.A, incorporated in 1992
to supply electricity in the Province of Buenos Aires. Based in
Buenos Aires, Edelap owns and operates the distribution concession
of electric power in the Buenos Aires Province's departments of La
Plata, Berisso, Ensenada, Brandsen, Magdalena, and Punta Indio.
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B R A Z I L
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AVIANCA BRASIL: Sets Another Auction for July 10
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Richard Pedicini at AINOnline reports that a third attempt to
auction bankrupt Avianca Brasil will go ahead on July 10, barring
yet another last-minute restraining order.
In April, Brazil's third-largest carrier, Azul, sought to assume
about half Avianca's operations, taking on personnel, proposing the
assumption of aircraft leases, and gaining Avianca Brasil's landing
rights at Sao Paulo's Congonhas Airport, along with paired slots
including participation in the lucrative Rio de Janeiro shuttle,
according to AINOnline. A creditors' assembly approved a plan
dividing the airline into seven parts for auction in June, with
Latam and Gol promising each to bid $70 million for a slice, and
also capping payments to unsecured creditors at about $2,600, the
report relays. A suit by Swissport, owed $4.4 million, derailed
that auction, the report notes.
Avianca Brasil's operations shrunk as lessors took back aircraft
until, down to four airplanes, Brazilian civil aviation authority
ANAC suspended the airline's operations on May 24, the report says.
A bankruptcy court rejected a sweetened $145 million offer by
Azul, and on June 24 ANAC canceled Avianca Brasil's passenger and
freight certificates and announced it would immediately
redistribute the slots, in accordance with legislation, the report
discloses. While Azul holds a small number of slots at Congonhas,
it won classification as a new entrant to the airport, gaining the
right to more slots, the report says. Smaller regional airlines
also showed interest, but the bankruptcy court on June 28
prohibited ANAC from redistributing the slots, pending the July 10
auction, the report notes.
The dispute has led to Azul's withdrawal from airline association
ABEAR, leaving it to Gol, Latam, the moribund Avianca Brasil, and
minor regional lines, the report relays. Increasingly aggressive
advertising has touted Azul as offering the most destinations in
the country, about a third of domestic flights, and as "the most
Brazilian of airlines," flying E-Jets produced by Embraer, the
report says. Fares have risen in markets left underserved after
losing Avianca Brasil flights, leaving some passengers and vacation
packaging agencies to turn to intercity buses, the report adds.
Elsewhere on the continent, new management took control at
Colombia's Avianca when the carrier defaulted on a $456 million
loan made six months ago by United Airlines, the report discloses.
Argentina's Avianca has also suspended operations, although those
amounted to just two ATRs operating two routes, the report relays.
Bloomberg reported that German Efromovich, who bought Colombia's
Avianca out of bankruptcy in 2004 and still owns the majority
stake, is interested in buying 30 percent of troubled Alitalia and
taking on the CEO role, the report notes.
Even if the July 10 slot auction occurs, the final outcome remains
unclear. Gol, Latam, and Azul have each advanced up to $35 million
to keep Avianca Brasil operating and can use that money as part of
a bid, getting slots as a way of extracting their money, the report
relays. But if, as Azul claims, its larger competitors seek to
keep it out of Congonhas, as long as the Avianca slots situation
remains unresolved, that goal is accomplished, the report
discloses. The smaller regional airlines might not control the
resources to buy the slots at auction as an Avianca asset, but they
could hope to win them in a redistribution by ANAC, the report
says.
If history serves as any guide, the appeals process could drag on.
After Varig ceased operations, its check-in counters at Guarulhos
airport sat empty for months despite extreme overcrowding at the
airport, the report notes. When VASP ceased operations,
operational Boeing jets sat parked at Congonhas for a decade until
creditors finally shredded them for their value as aluminum, the
report relays. Brazilian court cases can take effectively forever
on a business timeline, the report notes. The auction will be
valid if no one objects, but plenty of actors have something to
gain by challenging it, such as the regional candidates for free
slots, and plenty with little to lose, such as unsecured creditors
who would get next to nothing in the proposed distribution of the
proceeds, the report adds.
About Avianca Brasil
Avianca Brazil, officially Oceanair Linhas Aereas S/A, is a
Brazilian airline based in Sao Paulo, Brazil. It operates
passenger services from more than 20 destinations. It is hailed
as
the fourth largest airline in Brazil. Synergy Group is the parent
company of Avianca Brazil.
On December 10, 2018, Avianca Brazil filed for bankruptcy when
three lessors took a move to gain possession of 30% of the
airline's 50 all-Airbus fleet. The airline further blamed high
fuel prices and a strong dollar for its troubles. The airline
noted at that time that flights won't be affected.
Since the airline filed for bankruptcy, its operations
progressively diminish until they were suspended in late May 2019.
CESP-COMPANHIA ENERGETICA: S&P Affirms 'BB-' Global Scale Rating
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S&P Global Ratings said it affirmed its 'BB-' global scale and
'brAAA' national scale ratings on Brazil-based hydropower generator
CESP-Companhia Energetica de Sao Paulo. The 'bbb-' stand-alone
credit profile (SACP) is unchanged.
S&P said, "The 'bbb-' SACP reflects our view that leverage metrics
will remain at low levels regardless of the additional debt raised
in the context of CESP's privatization because we expect the
company to benefit from the operating efficiency initiatives that
new management is gradually implementing, despite the constraint
caused by the nearly single-asset nature of CESP's business." The
ratings on the company remain capped by those on the Federative
Republic of Brazil (global scale: BB-/Stable/B; Brazil national
scale: brAAA/Stable/--), considering CESP's sensitivity to the
domestic economy and because all of its assets and counterparties
are located in the country.
S&P said, "Following the privatization auction on Oct. 1, 2018,
when the State of Sao Paulo sold its controlling stake to VTRM
Energia Participacoes S.A. (not rated), we no longer see CESP as a
government-related company. VTRM was established in 2017 to be the
investment vehicle of Votorantim Energia, a subsidiary of
Votorantim S.A. (BBB-/Stable/--; brAAA/Stable/--), and Canadian
Pension Plan Investment Board (CPPIB; not rated) to explore
opportunities in the Brazilian renewable energy sector. Although it
also has two operational wind farms in northeast Brazil, S&P
considers CESP a core subsidiary because it represents the bulk of
the total assets. Given that VTRM is a joint venture, with no
single shareholder having effective control, our analysis does not
assume that CESP would be supported by either Votorantim or CPPIB.
"The stable outlook reflects that on the sovereign, given our view
that the ratings on CESP are limited to our ratings on Brazil based
on the company's sensitivity to the domestic economy and because
all its assets and counterparties are located in the country. In
this context, the 'bbb-' SACP, three notches above the issuer
credit rating, provides a downward protection.
"Given that we cap the ratings on CESP at the sovereign level, if
we were to downgrade Brazil in the next 12 months, we could take a
similar rating action on the company. We don't envision a scenario
in the near term that could lead us to lower the SACP. However, we
could downgrade CESP if the company pursues a more aggressive
financial policy, leading to net debt to EBITDA consistently above
2x.
"We don't expect an upgrade in the next 12 months, because our
ratings on the company are capped at the sovereign level. A higher
SACP is unlikely because the ratings are constrained by CESP's
business risk profile, considering CESP's single-asset nature."
CESP is a Brazil-based electric power generation company that
maintains with three hydro plants, Porto Primavera (1.54 MW of
capacity and concession rights until 2049), Jaguari (13 MW of
installed capacity and concession rights until 2020), and Paraibuna
(48 MW of installed capacity and concession rights until 2021),
located in the state of Sao Paulo.
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C O L O M B I A
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NBFI CREDIVALORES: S&P Cuts LongTerm Issuer Credit Rating to 'B'
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S&P Global Ratings said it lowered its long-term issuer credit and
senior unsecured debt ratings on Colombia-based NBFI Credivalores -
Crediservicios SAS to 'B' from 'B+'. S&P Global Ratings also
affirmed its 'B' short-term issuer credit rating on the company.
Accordingly, S&P also lowered its stand-alone credit profile (SACP)
on Credivalores to 'b' from 'b+'. The outlook is stable.
S&P said, "We lowered the ratings on Credivalores following the
deterioration of its risk position due to the significant increase
in past due loans over the past few quarters. Although
deterioration already peaked in December 2018, we expect the NPAs
plus NCOs ratio to be about 15% in the next 12-18 months and still
compare above that of its regional peers. In addition, coverage of
NPAs by loan loss reserves fell below 100%. The company faced
significant deterioration in its credit card business coupled with
specific operational problems in its payroll and insurance
financing products. The latter weakened its risk profile and led to
a spike in its delinquencies metrics. We believe the increased cost
of risk could impair the company's performance in the next 12
months.
"In our view, the company's NPAs plus NCOs and coverage metrics are
no longer comparable with those of its peers in the adequate risk
position category that we rate. Loan portfolio deterioration was
mainly caused by the credit card business, reflecting Colombian
economic imbalances over the past two years that also affected
other Colombian institutions. However, the impact lagged in
Credivalores due to its alliances with utility companies. In
addition, some of the company's customers were affected by the
influx of immigrants from Venezuela as well as the slowdown in the
oil and gas sector. In addition, payroll loans and insurance
financing product led to an increase in delinquencies due to some
operational problems. As of March 2019, the firm's NPAs plus NCOs
ratio was 15.5%, compared with 10.4% as of December 2017 and the
5.5% average of its regional peers. Moreover, the coverage of its
nonperforming loans by loan loss reserves was 90% at the same date.
Credivalores took several corrective actions that include
adjustments in its origination policies, reduction in the time of
response in credit originations, a new banking core, new chief risk
officer, alliances with new utility companies, and a review of all
the processes to reduce operational issues. Even though these
measures have begun to bear fruit and stop this negative
trend--mainly reflected in the most recent collections and vintage
analysis, we believe that they will gradually take time to be
reflected in healthier loan portfolio metrics that include
charge-offs and delinquencies above 360 days.
"The stable outlook reflects our view that in the next 12 months,
Credivalores will maintain a forecast RAC ratio of 7%, asset
quality metrics such as NPAs plus NCOs above 12% of its total
portfolio, and a concentrated funding structure. The stable outlook
also incorporates our view of the company's good market position
and diversified business mix.
"We could lower the ratings over the next 12 months if Credivalores
shows further deterioration in its loan portfolio reflected in an
NPAs plus NCOs ratio above 20%. We could also lower the ratings if
the company's positive adjustment in its SACP is not supported by
adequate capitalization, reflected in a RAC ratio consistently
below 7%. This could happen if the cost of risk rises, affecting
profitability and internal capital generation.
"We could raise the ratings on Credivalores in the next 12 months
if management's corrective measures improve asset quality metrics
quicker than we expect, reflected in an NPAs plus NCOs ratio
consistently below 12%. We could also raise the ratings if the firm
continues diversifying its funding sources by gaining access to
unsecured banking lines, or other multiple sources of funding, to
reduce its expected concentration."
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D O M I N I C A N R E P U B L I C
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DOMINICAN REPUBLIC: Looks Ahead as Cotonou Pact Expires in 2020
---------------------------------------------------------------
Dominican Today reports that the scope of globalization and the
commitments assumed by the members of the World Trade Organization
(WTO), as part of its multilateral agenda, has led countries to
adhere to their agenda with trade blocs, for which the Dominican
Republic continues to work to achieve a base agreement after the
Cotonou Agreement expires in February 2020.
The Dominican Republic is part of several blocks and trade
agreements, including Cotonou, signed in 2000 for a period of 20
years, after the Lome agreements expire, according to Dominican
Today.
"We are currently in the process of negotiating the new scheme that
will govern relations between the European Union and the group of
ACP countries (Africa, Caribbean and Pacific) once the Cotonou
Agreement expires in February 2020," said Foreign Affairs Vice
Minister, Hugo Rivera, 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.
Fitch Ratings affirmed Dominican Republic's Long-Term,
Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable
Outlook in September 2018.
The Troubled Company Reporter-Latin America reported on April 4,
2019 that the Dominican Today related that Juan Del Rosario of the
UASD Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
DOMINICAN REPUBLIC: Medina Pledges Support to Strawberry Growers
----------------------------------------------------------------
Dominican Today reports that President Danilo Medina disclosed the
government's financial support to the 66 members of the Jarabacoa
Strawberry Producers Association (ASOPROFREJA).
Upon reaching Manabao municipal district, central La Vega province,
"Danilo Medina was warmly and affectionately received by the
producers and residents of the area," the Presidency said in a
statement, according to Dominican Today.
"The 256th Surprise Visit, carried out by the Head of State to
reduce rural poverty, will increase the low incomes of small and
medium-scale producers in Jarabacoa, through the installation of
productive structures that will extend the sale period with a cold
chain; yields and will maintain the quality of the strawberry for
consumption," the report notes.
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.
Fitch Ratings affirmed Dominican Republic's Long-Term,
Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a Stable
Outlook in September 2018.
The Troubled Company Reporter-Latin America reported on April 4,
2019 that the Dominican Today related that Juan Del Rosario of the
UASD Economic Faculty cited a current economic slowdown for the
Dominican Republic and cautioned that if the trend continues,
growth would reach only 4% by 2023. Mr. Del Rosario said that if
that happens, "we'll face difficulties in meeting international
commitments."
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J A M A I C A
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JAMAICA: Bank Records Marginal Decline in International Reserves
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RJR News reports that there has been a marginal decline in
Jamaica's Net International Reserves (NIR).
Data released from the Bank of Jamaica show the reserves dipped by
US$39 million last month, according to RJR News.
It ended the month at just over US$3 billion, the report notes.
Despite the decline, it was still valued at 22 weeks of goods and
services, the report adds.
As reported in the Troubled Company Reporter-Latin America on June
27, 2019, RJR News said that Steven Gooden, Chief Executive Officer
of NCB Capital Markets, is warning that the increasing liquidity in
the economy might result in heightened risk to the financial market
if left unchecked. This, he said, is against the background of the
local administration seeking to reduce the debt to GDP to 60% by
the end of the 2025/26 fiscal year, which will see Government
repaying more than J$600 billion which will get back into the
system, according to RJR News.
TCRLA reported on Sept. 27, 2018, S&P Global Ratings revised its
outlook on Jamaica to positive from stable. At the same time, S&P
affirmed its 'B' long-and short-term foreign and local currency
sovereign credit ratings, and its 'B+' transfer and convertibility
assessment on the country.
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P U E R T O R I C O
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IRMA PEREZ: Savas Buying Dorado Property for $1.6 Million
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Irma Ivette Martinez Perez asks the U.S. Bankruptcy Court for the
District of Puerto Rico to authorize the private sale of (i) the
real property located at 303 Dorado Beach East, Dorado, Puerto
Rico, and (ii) a 20K Caterpillar Electric Generator to Mr. Nikkos
Savas for $1.576 million, free and clear of all liens and
encumbrances.
Per the schedules filed in the case, the Debtor is the co-owner of
the real property, valued at $1.55 million. She is also the
co-owner of a 20K Caterpillar Electric Generator valued at $6,000.
The Debtor has received a private offer from Mr. Savas through the
services of the appointed real estate broker Luxury Estates PR.
Mr. Savas' address is PMB 329, Dorado, Puerto Rico. The amount
offered is of $1.576 million, for the real estate and the electric
generator, which amount is, in the opinion of the Debtor, the
co-owner and the realtor, reasonable under the circumstances of the
case because prior efforts have failed to produce any better offer,
the property is wholly encumbered and only through the Debtor's
efforts to obtain agreements with secured creditors the sale will
produce sufficient funds to make substantial payments to other
creditors who would otherwise be only entitled to unsecured
claims.
The Debtor does not believe that she could achieve more favorable
terms for the sale of the Property.
She has concluded that the sale is fair and reasonable and in the
best interest of her estate and creditors. The parties entered
into the Sales Agreement. The interest of the co-owner of the
property, Mr. Carlos Santos Serrano, will also be sold with his
consent.
Lime Residential, LLC (formerly SPS Portfolio) has a duly perfected
security interest in the real property of the Debtor that exceeds
the total value of the sale. The Debtor is aware that there are
other parties that have security interests in the property. Her
negotiations with Lime Residential have lead debtor to believe that
it will accept not less than $1.050 million. Were it not for this,
the remaining creditors who claim to have a security interest would
be able to receive no distribution at all.
Exhibit IV reflects the balances owed in relation to creditors who
claim a security interest that have filed no claims. The amount of
Fees and Expenses attributable to debtor and the co-owner in
relation to the sale and cancellation of mortgages totals $22,219
as detailed in Exhibit V, which includes invoices for the deeds and
instances required. he Applications for employment of Notary
Publics are pending approval from the court.
The amount of the Real Estate Brokers' commission totals $49,171.
An application for the employment of the Realtor was filed at
docket 47 and is pending approval by the court.
Exhibit VII contains the title study that reflects, not only the
registered liens, but also the Deed claiming the property as
homestead of the Debtor.
The Debtor is proposing the following use for the proceeds from the
sale:
Creditor Amount Owed Amount to be Paid
-------- ----------- -----------------
Lime Resiedential, LLC $1,349,198 $1,050,000
(1st Mortgage)
Lime Resiedential, LLC $493,931 $0
(2nd Mortgage)
Banco Popular (Claim 5) $46,764 $40,000
Municipal Revenue Collection $13,180 $13,180
Unit (CRIM)
Department of the Treasury $10,111 $10,111
(Claim 9)
Priority Taxes (Claim 9) $89,147 $89,147
Other Taxes Lien (Claim 9) $696,521 $135,853
Dorado Beach East (Claim 1) $87,946 $45,000
Notarial Expenses - Deeds of $22,218 $22,218
Sale and Cancellation of Liens
Real Estate Broker's $49,171 $49,171
Commission Exhibit
Homestead - Debtor $121,319 $121,319
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Totals $1,576,000
The Debtor is also asking, if the sale is approved, authorization
to pay Notary's fees and expenses as detailed, as well as the Real
Estate Broker's Commissions, upon closing.
The Debtor has determined that the private sale of the Property is
in the best interest of her estate and creditors. A public auction
would cause delay, require the Debtor's estate to incur substantial
additional costs, the Debtor does not believe an auction would
result in additional value sufficient to justify the incurrence of
such costs. Moreover, she has conducted an extensive marketing
process. Additional delay would only result in the loss of the
opportunity to sell the property at this price. Accordingly, she
submits that the private sale of the Property is appropriate under
the circumstances.
A copy of the Agreement attached to the Motion is available for
free at:
http://bankrupt.com/misc/IRMA_PEREZ_48_Sales.pdf
Irma Ivette Martinez Perez sought Chapter 11 protection (Bankr.
D.P.R. Case No. 19-00414) on Jan. 30, 2019. The Debtor tapped
Teresa M. Lube Capo, Esq., atLube & Soto Law Offices PSC as
counsel.
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T R I N I D A D A N D T O B A G O
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CL FIN'L: NEVICOTT Seeks Info on CLICO Relinquishment
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Trinidad and Tobago Newsday reports that attorneys for Natural
Energy Vehicle Infrastructure Corporation of TT (NEVICOTT), a CL
Financial (CLF) shareholder, have written to Central Bank Governor
Dr Alvin Hilliaire asking for a "clear and finite" timetable for
the bank's relinquishing of the group's insurance arm, CLICO.
In a pre-action protocol letter sent to Hillaire, on behalf of
NEVICOTT, attorney Peter Taylor said his client was concerned that
the bank has not fulfilled its statutory obligations by
relinquishing control of CLICO although the insurance
conglomerate's positive net worth was now in excess of $600 million
and had been repaying its debts, according to Trinidad and Tobago
Newsday.
NEVICOTT has also, in a separate court action, filed an application
before High Court Judge Kevin Ramcharan seeking to put a stay on
the further sale of CL Financial assets until the joint liquidators
present audited financial statements, the report relays.
The shareholder has specifically asked for a stay of an August 2018
order authorizing the disposition of Methanol Holdings Limited
shares and an injunction to restrain the joint liquidators from
soliciting purchasing the assets of CLF or the sale of any of the
assets, the report relays.
In its reply to NEVICOTT's application, the joint liquidators have
argued that there was no basis to grant the stay to stop the sale
of Methanol Holdings and Holiday Inn as there was already a sale
agreement in place for Holiday Inn which is due to be finalized in
July and any stay may expose the company to a claim for damages if
the transaction was not finalized, the report discloses.
NEVICOTT became a CLF shareholder when it purchased 5,878 ordinary
shares from attorney David Hannays, and had to apply to the High
Court to have the CL Financial shares transferred to it, as the
liquidation process is under judicial control, the report notes.
In 2017, the Government filed a court action to have CL Financial
placed in liquidation, following a threat by the group's
shareholders to hold a special meeting to take control of the
company, the report recalls.
In the hearing of the application before Ramcharan, the joint
liquidators have also argued that NEVICOTT has not provided proof
of funds, adding that the letter to the minister spoke of the
investment bank saying it could help raise the US$2 billion, but
did not say it actually had the money, the report notes.
They also argued that the debt owed by CLF was US$4.7 billion and
the Government was only a 40 per cent creditor of the entire sum
due and owing, the report discloses.
Ramcharan is expected to issue a decision on NEVICOTT's injunction
application on July 9, the report adds.
About CL Financial
CL Financial was one of the largest privately held conglomerate in
Trinidad and Tobago. It was originally founded as an insurance
company and has since expanded to be the holding company for a
diverse group of companies and subsidiaries.
CL Financial however experienced a liquidity crisis in 2009 that
resulted in a "bail out" agreement by which the government of
Trinidad and Tobago loaned the company funds ($7.3 billion as of
December 2010) to maintain its ability to operate, and obtained a
majority of seats on the company's board of directors.
The companies to be bailed out were: CL Financial Ltd (CLF);
Colonial Life Insurance Company Ltd (CLICO); Caribbean Money Market
Brokers Ltd (CMMB); Clico Investment Bank (CIB) and British
American Insurance Company (Trinidad) Ltd (BAICO).
As reported in the Troubled Company Reporter-Latin America in July
2017, CL Financial Limited shareholders vowed to pay back a TT$15
billion (US$2.2 billion) debt to the Trinidad Government.
CL FIN'L: Payouts in Bailout Should be Examined Closely, Judge Says
-------------------------------------------------------------------
Trinidad and Tobago Newsday reports that CL Financial still owes
still owes taxpayers $280 million since 2000, plus $850 million,
even as the Permanent Secretary in the Ministry of Finance has told
a High Court judge that a CLICO depositor has received a $109
million payout.
Senior Counsel Deborah Peake, in revealing this to High Court judge
Frank Seepersad, said the Ministry of Finance is very concerned
about revealing the names of people who received very large sums
for security reasons, the report notes. Social activist Afra
Raymond won yet another lawsuit under the Freedom of Information
Act in the San Fernando High Court, the judge ruling that the
minister must tell him how many people were paid in the bailout and
the amounts paid, the report relays.
Judge Seepersad agreed with Peake, however, that people should not
be made targets by criminals, and so their names must be withheld.
But Seepersad, in a 46-page judgment, said there is a cloud of
secrecy over pay-outs and government's recovery from CL Financial
assets, the report relays.
Mr. Seepersad said all is not well in the bailout and the payments
made should be subject to rigorous public scrutiny, and called for
the release of the contents of the Commission of Enquiry into the
collapse of CLICO, Trinidad and Tobago Newsday cites. In 2011,
British jurist Sir Anthony Colman started the inquiry and presented
his findings in June 2016. He died in 2017, the report adds.
About CL Financial
CL Financial was one of the largest privately held conglomerate in
Trinidad and Tobago. It was originally founded as an insurance
company and has since expanded to be the holding company for a
diverse group of companies and subsidiaries.
CL Financial however experienced a liquidity crisis in 2009 that
resulted in a "bail out" agreement by which the government of
Trinidad and Tobago loaned the company funds ($7.3 billion as of
December 2010) to maintain its ability to operate, and obtained a
majority of seats on the company's board of directors.
The companies to be bailed out were: CL Financial Ltd (CLF);
Colonial Life Insurance Company Ltd (CLICO); Caribbean Money Market
Brokers Ltd (CMMB); Clico Investment Bank (CIB) and British
American Insurance Company (Trinidad) Ltd (BAICO).
As reported in the Troubled Company Reporter-Latin America in July
2017, CL Financial Limited shareholders vowed to pay back a TT$15
billion (US$2.2 billion) debt to the Trinidad Government.
=================
V E N E Z U E L A
=================
VENEZUELA: Opposition to Hold Talks With Maduro Regime
------------------------------------------------------
Gideon Long at The Financial Times reports that the Venezuelan
opposition said it would take part in talks in Barbados with the
government of president Nicolas Maduro in an attempt to find a way
out of the political deadlock that has gripped the nation for
months.
In a statement, it also said it would meet Enrique Iglesias, the
European Union's special adviser for Venezuela, for talks in
Caracas, according to The Financial Times.
It did not give dates for either event but Mr. Iglesias is expected
in Venezuela, the report relays.
Venezuela's opposition, led by the head of Congress Juan Guaido,
has been trying to oust Mr. Maduro since the start of this year,
saying the president won power through bogus elections in 2018 and
is an illegitimate leader, the report notes.
But Mr. Maduro has resisted all efforts to remove him and the
opposition has been forced to back down, the report relays. It has
taken part in two rounds of negotiations in Oslo brokered by the
Norwegian government, the report notes. The talks in Barbados are
part of the same process, the report says.
While accepting the invitation to talk, Mr. Guaido insisted: "We do
not have unlimited time. Every day that passes the situation
worsens." He added that the opposition had an "enormous and
historical responsibility" to seek ways out of the crisis, the
report notes.
He called on Mr. Maduro's opponents to unite behind him, the report
relays. Some hardline members of Venezuela's opposition have
opposed the Norwegian-led talks, saying they are a waste of time
and simply allow Mr. Maduro to prolong his grip on the presidency,
the report notes.
The talks come amid a profound economic and humanitarian crisis in
Venezuela, the report says. The economy has halved in size since
Mr Maduro took office in 2013, inflation is rife and an estimated
4m people have fled due to a lack of food, work and medicine, the
report discloses.
The United Nations accused the Maduro government of human rights
abuses including "arbitrary detention, torture and ill-treatment,
sexual violence, killings and enforced disappearance," 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.
Standard and Poor's long- and short-term foreign currency sovereign
credit ratings for Venezuela stands at 'SD/D' (November 2017).
S&P's local currency sovereign credit ratings are 'CCC-/C'. The May
2018 outlook on the long-term local currency sovereign credit
rating is negative, reflecting S&P's view that the sovereign could
miss a payment on its outstanding local currency debt obligations
or advance a distressed debt exchange operation, equivalent to
default.
Moody's credit rating (long term foreign and domestic issuer
ratings) for Venezuela was last set at C with stable outlook (March
2018).
Fitch's long term issuer default rating for Venezuela was last set
at RD (2017) and country ceiling was CC. Fitch, on June 27, 2019,
affirmed then withdrew the ratings due to the imposition of U.S.
sanctions on Venezuela.
*********
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 2019. 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
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written permission of the publishers.
Information contained herein is obtained from sources believed to
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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.
.
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