/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/221223.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, December 23, 2022, Vol. 23, No. 250 Headlines A R G E N T I N A GAUCHO GROUP: Maria Echevarria to Remain as CFO B R A Z I L BRAZIL: Chicken Production & Exports Seen Rising in 2023 JBS SA: 17% of Cattle Bought by Firm Came From 'Irregular' Ranches C H I L E VTR FINANCE: Moody's Cuts CFR to B2 & Senior Unsecured Notes to B3 P U E R T O R I C O ESJ TOWERS: Gets OK to Hire Special Counsel in Chubb Suit T R I N I D A D A N D T O B A G O CARIBBEAN AIRLINES: Expands Fleet TRINIDAD & TOBAGO: Senators Have Issues With Scrap Metal Law - - - - - ================= A R G E N T I N A ================= GAUCHO GROUP: Maria Echevarria to Remain as CFO ----------------------------------------------- Gaucho Group Holdings, Inc. and Maria Echevarria, its chief financial officer, entered into an employment agreement to continue to serve as the Company's chief financial officer, effective Jan. 1 for a three-year term, subject to automatic renewal of successive one-year periods, as disclosed in a Form 8-K filed with the Securities and Exchange Commission. Pursuant to the Employment Agreement, Ms. Echevarria will receive a base salary of $230,000 for 2022; $250,000 for the second year; and $275,000 for the third year, which may be increased or decreased from time to time with the approval of the board of directors. In addition, Ms. Echevarria is eligible for an annual cash and equity bonus based on certain key performance indicators, as approved by the board of directors, and she is entitled to participate in the Company's 2018 Equity Incentive Plan, insurance, health, retirement, and other benefit plans. During her employment and for a period of one year thereafter, Ms. Echevarria is prohibited from competing with the Company within its geographic area and, for one year following the last day of her employment, from soliciting the Company's customers and the Company's employees for a competing business. The Employment Agreement includes a "clawback" provision in which Ms. Echevarria agrees that the Company can recoup any compensation or benefits provided to her that are required by applicable law to be subject to recovery or recoupment. Further, the Employment Agreement contains certain rights of Ms. Echevarria and the Company to terminate Ms. Echevarria's employment, including a termination by the Company for "Cause" as defined in the Employment Agreement. The Employment Agreement also specifies certain compensation due following termination of employment, including severance payments to Ms. Echevarria if she is terminated "Without Cause" or resigns for "Good Reason" as set forth in the Employment Agreement, in which case she is entitled, following termination, to 12 months of her current base salary, provisions for an annual bonus that Ms. Echevarria would have earned had no termination occurred, and reimbursement for health insurance premiums for 12 months. About Gaucho Group Headquartered in New York, NY, Gaucho Group Holdings, Inc. -- http://www.algodongroup.com-- was incorporated on April 5, 1999. Effective Oct. 1, 2018, the Company changed its name from Algodon Wines & Luxury Development, Inc. to Algodon Group, Inc., and effective March 11, 2019, the Company changed its name from Algodon Group, Inc. to Gaucho Group Holdings, Inc. Through its wholly-owned subsidiaries, GGH invests in, develops and operates real estate projects in Argentina. GGH operates a hotel, golf and tennis resort, vineyard and producing winery in addition to developing residential lots located near the resort. In 2016, GGH formed a new subsidiary and in 2018, established an e-commerce platform for the manufacture and sale of high-end fashion and accessories. The activities in Argentina are conducted through its operating entities: InvestProperty Group, LLC, Algodon Global Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its wines in Europe through its United Kingdom entity, Algodon Europe, LTD. Gaucho Group reported a net loss of $2.39 million for the year ended Dec. 31, 2021, a net loss of $5.78 million for the year ended Dec. 31, 2020, and a net loss of $6.96 million for the year ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had $25.39 million in total assets, $6.86 million in total liabilities, and $18.53 million in total stockholders' equity. =========== B R A Z I L =========== BRAZIL: Chicken Production & Exports Seen Rising in 2023 -------------------------------------------------------- Ana Mano at Reuters reports that Brazilian chicken processors including heavyweights JBS SA and BRF SA will collectively increase output and exports in the new year, projections from meat industry group ABPA showed. Brazilian companies will process up to 14.750 million tonnes of chicken meat in 2023 while they are also poised to raise exports by up to 8.5% to an estimated 5.2 million tonnes, the data showed, according to Reuters. Ricardo Santin, ABPA president, said Brazil can increase its global share of chicken exports even as local companies grapple with higher corn prices and increases in packaging and fuel costs, the report notes. Santin said 100 kilograms (220 pounds) of Brazilian broiler chicken is priced at around 146 euros ($156) compared with 263 euros for the European Union product and around 268 euros for U.S. chicken, the report relays. Another Brazilian competitive advantage is the country never had outbreaks of bird flu and remains free of the highly pathogenic disease, which has affected global chicken suppliers like the United States this year, the report discloses. Outbreaks in Venezuela, Colombia, Ecuador, Peru and Chile this year have prompted Brazilian companies to implement strict protocols, Santin said, the report relays. "This year cases are nearer. There have more cases at the same time in the region," Santin said, 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 will be sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. In July 2022, Fitch Ratings affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-' and revised the Rating Outlook to Stable from Negative. In June 2022, S&P Global Ratings also affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil. Moody's, in April 2022, affirmed Brazil's long-term Ba2 issuer ratings and senior unsecured bond ratings, (P)Ba2 senior unsecured shelf ratings, and maintained the stable outlook. On the other had, DBRS, in August 2022, confirmed Brazil's Long-Term Foreign and Local Currency Issuer Ratings at BB (low). JBS SA: 17% of Cattle Bought by Firm Came From 'Irregular' Ranches ------------------------------------------------------------------ Ana Mano at Reuters reports that nearly 17% of the cattle bought by JBS SA (JBSS3.SA) in Brazil's Para state in the Amazon rainforest allegedly came from ranches with "irregularities" such as illegal deforestation, according to an audit by federal prosecutors. The audit, which examined cattle purchases between July 2019 and June 2020, said that the world's largest meatpacker allegedly bought some 93,734 head from irregular ranchers, according to Reuters. Overall, the audit found 136,172 irregular cattle purchases by JBS and other unlisted meatpackers that operate in the region, the report notes. JBS said in a statement the purchases were made more than 2 years ago when it had imprecise criteria for ranchers, adding the issue had subsequently been fixed, the report relays. According to the audit, the world's largest meatpacker allegedly bought some 93,734 head from irregular ranchers, the report notes. JBS was responsible for nearly 69% of the 136,172 irregular cattle purchases by more than 15 companies operating in the region, the report relays. The audit results have fed growing concerns that JBS could be contributing to destruction of the world's largest rainforest, the report discloses. In the previous auditing cycle covering the period between January 2018 and June 2019, JBS allegedly bought about 301,000 head of cattle from irregular ranchers, federal prosecutors said, the report says. Cattle ranching along with clearing land to sell timber or grow crops are driving deforestation in the Amazon rainforest, the report notes. A number of meatpackers signed commitments with prosecutors in 2013, agreeing not to buy cattle from ranches that were cleared illegally since 2008, or have been blacklisted for environmental crimes, the report relays. JBS and more than a dozen other major agriculture firms have also pledged to eliminate deforestation from their supply chains by 2025, including destruction linked to indirect suppliers that sell to middlemen who then sell to meatpackers, the report says. The audit found no cattle purchase irregularities linked to Minerva (BEEF3.SA), a JBS rival and the only other listed company scrutinized, the report adds. About JBS SA 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. ========= C H I L E ========= VTR FINANCE: Moody's Cuts CFR to B2 & Senior Unsecured Notes to B3 ------------------------------------------------------------------ Moody's Investors Service has downgraded VTR Finance N.V. ("VTR")'s corporate family rating and VTR Comunicaciones SpA's 4.375% $392 million and 5.125% $474 million senior secured notes to B2 from Ba3. At the same time, Moody's also downgraded the rating of VTR's 6.375% $483 million senior unsecured notes to B3 from B1. The outlook remains negative. This rating action reflects the persistent deterioration of the company's credit metrics and market share in light of the challenging operating prospects in Chile, which will make difficult a material reversal of this trend in 2023 and beyond. The rating action also considers the lack of visibility regarding the JV's final capital structure, strategy, capex plans or potential parental support. Downgrades: Issuer: VTR Finance N.V. Corporate Family Rating, Downgraded to B2 from Ba3 Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B1 Issuer: VTR Comunicaciones SpA Backed Senior Secured Regular Bond/Debenture, Downgraded to B2 from Ba3 Outlook Actions: Issuer: VTR Comunicaciones SpA Outlook, Remains Negative Issuer: VTR Finance N.V. Outlook, Remains Negative RATINGS RATIONALE The rating action incorporates the persistent lack of visibility regarding the company's future capital structure, business strategy, capex plans or potential parental support, following the combination of VTR and America Movil, S.A.B. de C.V. (America Movil)'s, Claro Chile, on October 6. The rating action also incorporates the deterioration in credit metrics and liquidity driven by lower ARPU, higher churn and subscriber losses. For the last twelve months ended September 2022, VTR posted a Moody's adjusted leverage of 9.8 times and EBITDA margin of 26.5%, which negatively compare to the 6 times and 36.2% posted in December 2021. Despite the benefits of consolidation in the market following the execution of the JV, the operating environment will continue to challenge VTR's ability to revert the negative trend and improve credit metrics in 2023-2024 and potentially beyond. Chilean telecom operators have been actively expanding their fiber footprints and divesting infrastructure to make more efficient investments. At the same time, Moody's expects GDP growth in Chile to slow down significantly in 2022 to about 2% and contract by 1% in 2023 as financial conditions tighten from central bank rate hikes in response to high inflation, consumption growth moderates in the absence of additional pension withdrawals, and as the phasing out of pandemic emergency spending weighs on demand. As of September 2022, VTR had CLP 61 billion ($64 million) in cash and posted negative free cash flow at CLP 76.4 billion ($80 million) for the last twelve months, including Moody's standard adjustments. VTR has no material maturities in the short term, and it has access to two committed revolving credit facilities, totaling about $247 million ($200 million due in June 2026, denominated in US dollars; and CLP45 billion due in June 2026 denominated in Chilean pesos). Nonetheless, Moody's expects further pressure on liquidity driven by negative free cash flow associated with the company's capex needs to maintain its competitive position. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, an upgrade is unlikely in the short term; however, the outlook could be changed to stable if VTR is able to maintain its current market share while outlining clear details on its the strategic plan including expected synergies, capital structure, financial policies and liquidity management or other considerations like explicit support from the shareholders, Liberty Latin America Ltd. (LLA) and America Movil, that would improve bondholders protection. The ratings could be downgraded if the company's liquidity further deteriorates due to negative free cash flow. The lack of visibility of a detailed strategic plan that includes operational guidance, capital structure, potential parental support and other sources of liquidity, could also put negative pressure on the ratings. Downward ratings pressure could occur should VTR's declining market share and subscriber trend continue coupled with weak credit metrics without any clear prospects to revert the trend. The principal methodology used in these ratings was Telecommunications Service Providers published in September 2022. Following the execution of the JV on October 6, 2022, the new entity will be able to offer mobile, broadband, pay TV and fixed telephony, which would allow to offer bundles and benefit from cross-selling opportunities. The parties expect to extract synergies of over $180 million, 80% of them in the first three years. VTR is focused on the residential pay TV and fixed broadband markets, while Claro Chile is focused on the enterprise segment and has a 21% market share in the mobile business as of June 2022. VTR's network passes 4.3 million homes and serves about 2.6 million fixed revenue generating units as of September 2022. The company also serves around 264,200 mobile subscribers. VTR reported revenue of around $0.6 billion for the 12 months that ended September 2022. Moody's estimates a pro forma revenue for the combined JV at $1.5 billion with a Moody's adjusted leverage of 6.2x as of the same date. ===================== P U E R T O R I C O ===================== ESJ TOWERS: Gets OK to Hire Special Counsel in Chubb Suit --------------------------------------------------------- ESJ Towers, Inc. received approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ a special counsel. The Debtor has selected Luis Rodriguez Lopez, Esq., to substitute Luis Vivoni Lopez, Esq., in the state court litigation styled Consejo de Titulares del Condominio ESJ Towers, ESJ Towers, Inc., Attenure Holdings Trust 1 y HRH Property Holdings LLC v. Chubb Insurance Company of Puerto Rico (Civil Case Num. CA2019CV03427) with the Court of First Instance of Puerto Rico, Superior Section of Carolina. Mr. Lopez will charge $225 per hour for his services and $125 per hour for his associates and contract attorneys. In court papers, Mr. Lopez disclosed that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Lopez holds office at: Luis M. Rodriguez Lopez, Esq. P.O. Box 70250, Suite 279 San Juan, PR 00936 Tel: (787)-767-7502 Mobile: (787-460-3193 Email: rodriguezlopez@grllaw.net About ESJ Towers ESJ Towers, Inc. owns the ESJ Towers in Carolina, P.R. The luxury apartments and condo units at ESJ Towers have direct access to Isla Verde Beach, widely considered one of the best in Puerto Rico. ESJ sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 22-01676) on June 10, 2022, with as much as 50 million in both assets and liabilities. ESJ President Keith St. Clair signed the petition. Judge Enrique S. Lamoutte Inclan oversees the case. The Debtor tapped Charles A. Cuprill, Esq., at Charles A. Cuprill, PSC Law Offices as legal counsel; Ramon Luis Nieves, Esq., at RL Legal Consulting Services, LLC as special counsel; Dage Consulting CPAS, PSC as financial advisor; and De Angel & Compania, CPA, LLC as auditor. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors on Sept. 12, 2022. MRO Attorneys at Law, LLC and Dage Consulting CPAS, PSC serve as the committee's legal counsel and financial advisor, respectively. ===================================== T R I N I D A D A N D T O B A G O ===================================== CARIBBEAN AIRLINES: Expands Fleet --------------------------------- RJR News reports that Caribbean Airlines is continuing to expand its fleet of aircraft. The Trinidad and Tobago based carrier has added its ninth 737 Max 8 aircraft, according to RJR News. The new plane entered service on Dec. 16. Caribbean Airlines CEO Garvin Medera says the new plane is another milestone in the airline's fleet renewal, the report notes. The new planes have a higher passenger capacity, with updated amenities and more premium offerings, the report relays. About Caribbean Airlines Caribbean Airlines Limited - http://www.caribbean-airlines.com/providespassenger airline services in the Caribbean, South America, and North America. The company also offers freighter services for perishables, fish and seafood, live animals, human remains, and dangerous goods. In addition, it operates a duty free store in Trinidad. Caribbean Airlines Limited was founded in 2006 and is based in Piarco, Trinidad and Tobago. Caribbean Airlines is among many airlines whose business has been greatly affected in 2020 by the slowdown of international travel caused by the COVID-19 pandemic. The government of Trinidad & Tobago guaranteed a US$65 million loan for the airline, and that funding has helped with the airlines' cash flow shortfall since May 2020. In September 2020, the airline related it will be taking cost-cutting measures to help keep it afloat. The measures, which was to affect some 1,700 employees, included salary deductions, no-pay leaves and lay-offs. TRINIDAD & TOBAGO: Senators Have Issues With Scrap Metal Law ------------------------------------------------------------ Ria Taitt at Trinidad Express reports that independent Senator Paul Richards and Opposition Senator Jearlean John have questioned the provision in the Scrap Metal Bill which allows police officers to use "reasonable force" in the performance of their duties under the Act. Contributing to the debate in the Senate, John said in the UK legislation, the law stated that an officer was "not entitled to use force." Referring to the controversy over a recent situation in which the police confronted someone who was holding a baby, John said: "Why do we think we have to legalise the police using force? Why would we want to enshrine in law that the police must use force in somebody's business place. A lot of our police are professional and they will do what they have to do. "The point I am making is the people in this sector are poor and black, maybe brown . . . We don't have to empower the police to use force, this is overreach. We have enough violence in the country without enshrining it into law." Richards said he agreed with John that there was no need to further codify the use of reasonable force since the police were already trained in what level of use is required in certain circumstances, the report notes. "To further codify that is unnecessary and may also encourage some officers to have free licence to go extra distance and that will create more problems. We already seeing videos on social media where there are questions about legitimate use of 'reasonable force'. Saying that there was no evidence that people involved in the scrap iron sector were more violent than others, we disagreed with the 'reasonable force' provision," he said, according to Trinidad Express. John also questioned the clause which asked people to give up their enshrined rights (and allow officers to enter their premises) as a pre-condition for getting a licence. Richards said she was "ambivalent about this clause because it asked people to waive their property and privacy rights in order to get a licence. She questioned whether a similar provision existed in the legislation anywhere else in the world, the report notes. John also objected to the provision that excluded dwelling houses in the licensing regime, the report says. "Do you know how many of these businesses are in front of dwelling houses because it is a consolidation of costs . . . It don't have no rich people inside of this (business)," she said, the report discloses. She added that the President of the Scrap Iron Dealers Association said 90 per cent "that is 22,500 of the 25,000 people in the industry" are poor, the report notes. She said the licensing fees were punitive and expressed the hope that the Government was not using it to keep people out of the business, the report relays. She also took issue with the provision, which required scrap iron dealers to operate between the hours of 7 a.m and 6 p.m, the report notes. "I don't know how that will stop someone from stealing scrap metal. There are people who like to start work at 4 a.m. in the morning. When you working for yourselves, you are really hustling and I think it is extremely punitive," John said, the report discloses. "We already closed down the industry (in August) and 25,000 were on the breadline suffering and we don't have a care in the world and we are saying now they must work between seven and six and go inside and lie down to wait for seven the next day. People have mortgages to pay, children to feed. They hustle and want to work every hour of the day. I am from Charlotteville and that is the way I know it," John said, the report relays. Citing the delays in implementing the Pepper Spray legislation and the Procurement legislation, Opposition Senator Jearlean John said she was not optimistic the Government would meet its before-the-end-of-year deadline for the proclamation of the scrap metal legislation, the report notes. John said the Government had come to Parliament and debated bills which it said were urgent and very important, the report says. She said the Pepper Spray legislation (passed in July 2021) came to mind -"even as women are dying like flies, they can't get a fighting chance"--as well as the Procurement legislation (passed in 2020) which is still to be proclaimed, the report relays. John wanted the Attorney General to state how many of the 25,000 scrap iron collectors and dealers were currently licensed and therefore would be able to resume their operations, the report discloses. ********* 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 2022. 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 * * *