/raid1/www/Hosts/bankrupt/TCRLA

/raid1/www/Hosts/bankrupt/TCRLA_Public/240229.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 Thursday, February 29, 2024, Vol. 25, No. 44 Headlines A R G E N T I N A ARGENTINA: Exxon to Weigh US$1 Billion Sale of Shale Assets ARGENTINA: Provinces Threaten Oil Supply Cuts in Dispute with Milei B A H A M A S FTX GROUP: To Sell Shares in AI Startup Anthropic B E R M U D A DIGICEL INT'L: Moody's Assigns Caa1 CFR, Under Review for Upgrade B R A Z I L BRASKEM SA: S&P Lowers Global Scale ICR to 'BB+', Outlook Stable GOL LINHAS: Seeks to Hire Milbank LLP as Bankruptcy Counsel PETROBRAS: Has $1.7 Billion Oil Drilling Eco-Initiative C A Y M A N I S L A N D S OTEL SUKUK: Fitch Assigns 'BB+' Rating on Senior Unsecured Certs P U E R T O R I C O DISTRIBUIDORA NARANJITO: Case Summary & 17 Unsecured Creditors S T . K I T T S A N D N E V I S ST. KITTS & NEVIS: Shows Progress in Climate Adaptation, IMF Says - - - - - ================= A R G E N T I N A ================= ARGENTINA: Exxon to Weigh US$1 Billion Sale of Shale Assets ----------------------------------------------------------- Buenos Aires Times reports that Exxon Mobil Corp is mulling bids for its Argentine shale assets as the US energy giant looks to unwind its bet on the South American nation's oil and gas riches. Exxon received several offers for holdings in Argentina's heralded Vaca Muerta formation in Patagonia earlier this month, according to people familiar with the matter, according to Buenos Aires Times. The assets, which comprise stakes it owns with QatarEnergy in seven oil-and-gas blocks in the shale patch as well as holdings in a pipeline, have been valued at around US$1 billion, said the people, who declined to comment publicly on private talks, the report notes. Exxon's push to sell the assets is unfolding even as drillers welcome a more hands-off approach by Argentina's new President Javier Milei toward the oil-and-gas industry than the previous government, the report discloses. An Exxon spokesperson declined to comment. Exxon put all of its shale assets in Argentina under review last year in a move seen as a blow to the Argentine government's hopes of fully tapping the riches of Vaca Muerta - Spanish for "dead cow." The region's geology rivals US basins like the Permian, but drilling has been held back in part by protectionist policies, leaving the lion's share to national energy companies, the report relates. Three of those companies - YPF SA, Pampa Energia SA and Tecpetrol SA - are partners in some of the acreage Exxon is selling, the report relays. Argentina's economic protectionism is being undone by Milei, who rose to power in December promising sweeping deregulation, the report notes. Drillers are already benefiting from his government's market-oriented approach that has seen oil and fuel prices rise toward so-called export-parity levels, the report discloses. To really lure global investors to Vaca Muerta, Milei still needs to undo capital controls to allow companies to freely send profits abroad, the report adds. 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. ARGENTINA: Provinces Threaten Oil Supply Cuts in Dispute with Milei ------------------------------------------------------------------- Buenos Aires Times reports that Argentina's main petroleum-producing provinces have threatened to cut supplies to the rest of the country over funding reductions ordered by President Javier Milei. "Not a drop of oil will come out if they don't respect the provinces once and for all and take their foot off our back," Chubut Province Governor Ignacio Torres told the opposition television channel C5N, according to Buenos Aires Times. Torres and counterparts from five other Patagonian provinces - Tierra del Fuego, Santa Cruz, Rio Negro, La Pampa and Neuquen - announced that "if the Economy Ministry does not deliver its [financial] resources to Chubut, then Chubut will not deliver its oil and gas," the report notes. Buenos Aires Times relays that the provincial leaders were angered by the austerity-minded Milei's insistence on withholding from Chubut some 13.5 billion pesos (US$15.3 million) in monthly transfers of federal tax revenues. Economy Minister Luis Caputo argued on X, the former Twitter, that the cut was necessary to collect on unpaid debt from Chubut to the federal government - and that 10 other provinces also owe money, the report discloses. In a message on X, Milei denounced the southern leaders as "fiscal degenerates," the report relays. But one prominent analyst and pollster, Artemio Lopez, said Milei might have miscalculated, the report says. "This is an unprecedented conflict due to its reach," he said. "There is a rebellion in the provinces, and a mistaken assessment by Milei about the level of conflict" the central government can engage in with various political actors, the report notes. For the president to pick a fight with a deeply unpopular Congress is one thing, Lopez said, the report notes. "But it is not the same when confronting governors. Most of them got a higher percentage of the vote than he did in the last election," he added. Argentina is the world's 39th largest exporter of crude oil and the 20th largest of gas. It imports refined fuels for internal consumption. Chubut (21.5 percent) and Neuquén (51.5 percent) accounted for three-quarters of Argentina's oil production in the second quarter of 2023. In 2022, Argentina's energy balance recorded a deficit of US$12 billion, but the government estimates a surplus of US$3.3 billion by 2024, due to the expansion of the unconventional Patagonian Vaca Muerta field (which is spread across Neuquén, Rio Negro and La Pampa), the report recalls. Milei Blasts Torres Milei, who was flying to the United States to attend the Conservative Political Action Conference (CPAC) gathering to be addressed by Donald Trump, took to X - in scores of posts - to blast Torres by his nickname, denouncing "Nacho and his accomplices," the report relays. He reminded them of an article in the penal code providing for jail sentences of up to two years for anyone hindering energy supplies, the report notes. "Don't make yourself a problem, Nachito, we will solve it in court," he posted, the report says. A statement from the president's office denounced "the waste of the provinces that refuse to reduce unnecessary expenses" and referred to the provinces' opposition as "a Chavista threat," the report discloses. Hours later, Torres responded: "I hope there is a channel for dialogue. The problem is that you don't know who to talk to," the report notes. The dispute arises amid growing protests over price and fee increases as the new president promotes extensive deregulations and drastic fiscal adjustment, the report adds. 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. ============= B A H A M A S ============= FTX GROUP: To Sell Shares in AI Startup Anthropic ------------------------------------------------- Dietrich Knauth at Reuters reports that bankrupt crypto exchange FTX may sell its shares in artificial intelligence startup Anthropic, a U.S. judge ruled. U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware, approved FTX's proposal to sell the shares after FTX reached a compromise in court with a group of FTX customers that had opposed the sale, according to Reuters. FTX invested $500 million in Anthropic in 2021, and currently holds a 7.84 percent stake in the company, according to court documents, the report notes. The company had sought permission to sell the shares as part of its court-supervised effort to liquidate its assets and repay customers who lost access to their accounts when the company collapsed in 2022, the report relays. "We are selling the Anthropic shares, as we are selling everything, and putting the money in the bank," FTX attorney Andy Dietderich said at a court hearing, the report discloses. FTX expects to sell the shares at a profit, and it will retain flexibility to sell its shares at the "most optimal and appropriate time," according to court documents, the report says. "Given the increased interest in AI and large language models, there has been significant appreciation in the value of the Anthropic Shares since the Debtors' acquisition and investment in Anthropic in 2021," FTX wrote in a Feb. 3 court filing, the report notes. FTX's 2021 investment initially gave it a 13.56% equity stake in Anthropic, the report discloses. The FTX stake has been diluted by the company's subsequent fundraising, which includes a $4 billion investment from Amazon.com, the report says. The customers that opposed the sale had argued that FTX did not actually own the Anthropic shares, because they were purchased with funds embezzled from FTX customers' deposits, the report relays. But they agreed to allow the sale to go forward, as long as they are allowed to argue later that FTX customers own any money generated from the future sale, the report notes. The report relays that Dietderich said that FTX already intends to repay customers using the sale proceeds, and it has enough cash to repay any specific group of customers that can convince a court that they owned the Anthropic shares. FTX currently has $6.4 billion in cash, Dietderich said, the report notes. FTX expects to pay all customers in full, although it will calculate their repayment based on cryptocurrency prices from November 2022, when FTX filed for bankruptcy amid a prolonged slump in the crypto market, rather than at the present, higher value of crypto assets, the report relays. FTX founder Sam Bankman-Fried was found guilty of stealing billions from customers on Nov. 2, in one of the biggest financial frauds on record, the report says. Bankman-Fried's sentencing is March 28, and he is expected to appeal his conviction. About FTX Group FTX is the world's second-largest cryptocurrency firm. FTX is a cryptocurrency exchange built by traders, for traders. FTX offers innovative products including industry-first derivatives, options, volatility products and leveraged tokens. Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that FTX paused customer withdrawals after it was hit with roughly $5 billion worth of withdrawal requests. Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell itself to its giant rival Binance, but Binance walked away from the deal amid reports on FTX regarding mishandled customer funds and alleged US agency investigations. At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step aside, and restructuring vet John J. Ray III was quickly named new CEO. FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc. (d/b/a FTX US), Alameda Research Ltd. and certain affiliated companies then commenced Chapter 11 proceedings (Bankr. D. Del. Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022. Additional entities sought Chapter 11 protection on Nov. 14, 2022. FTX Trading and its affiliates each listed $10 billion to $50 billion in assets and liabilities, making FTX the biggest bankruptcy filer in the US this year. According to Reuters, SBF shared a document with investors on Nov. 10, 2022, showing FTX had $13.86 billion in liabilities and $14.6 billion in assets. However, only $900 million of those assets were liquid, leading to the cash crunch that ended with the company filing for bankruptcy. The Hon. John T. Dorsey is the case judge. The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel; Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal North America, LLC as financial advisor. Kroll is the claims agent, maintaining the page https://cases.ra.kroll.com/FTX/Home-Index The Official Committee of Unsecured Creditors tapped Paul Hastings as counsel, FTI Consulting, Inc., as financial advisor, and Jefferies LLC as the investment banker. Young Conaway Stargatt & Taylor LLP is the Committee's Delaware and conflicts counsel. Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory T. Donilon, Edward L. Schnitzer, and David M. Banker, is representing Sam Bankman-Fried in the Chapter 11 cases. White-collar crime specialist Mark S. Cohen has reportedly been hired to represent SBF in litigation. Lawyers at Paul Weiss previously represented SBF but later renounced representing the entrepreneur due to a conflict of interest. ============= B E R M U D A ============= DIGICEL INT'L: Moody's Assigns Caa1 CFR, Under Review for Upgrade ----------------------------------------------------------------- Moody's Investors Service has placed Digicel International Finance Limited ("DIFL", "Digicel")'s Caa1 senior secured ratings under review for upgrade. Previously, the outlook was negative. Moody's also assigned a Caa1 Corporate Family Rating (under review for upgrade) to Digicel. At the same time, Moody's has withdrawn Digicel Group Holdings Limited (DGHL)'s Caa2-PD probability of default, Caa2 CFR and Ca senior unsecured ratings; Digicel Limited (DL) Caa3 senior unsecured ratings, DIFL's Caa3 senior unsecured and subordinated ratings and Digicel Group Two Limited's C senior unsecured ratings as these entities have completed chapter 15 processes. RATINGS RATIONALE The rating action reflects Digicel's announcement on January 29, 2024 that the company concluded the implementation of the approved Bermuda scheme of arrangement. Moody's views the transaction as a distressed exchange under its criteria, due to the economic losses for bondholders and lenders and the avoidance of a potential default. Moody's review will focus on Digicel's i) new shareholders' medium-term strategy including financial policies, operating strategy, board composition and liquidity management; and (ii) the company's competitive position in the markets in which it operates and the challenges that constrain operating and cash flow improvements, which include difficult economic and operating conditions in some of the company's large markets, namely Haiti which represents around 17% of the company's EBITDA. Depending on the magnitude of improvements in financial policies, operating strategy, board composition and liquidity management, the review may lead to a multi-notch upgrade. Governance considerations are material to the rating action. The company's G-5 score reflects its aggressive financial policy with a history of distressed exchanges in the last couple of years. The Caa1 CFR ratings reflects the company's new capital structure that includes 75% of the total debt on a secured basis, at DIFL level. The remaining debt is unsecured and is at Digicel MidCo Limited level with a preferred equity instrument at the Digicel Holdings (Bermuda) Limited level. Following the debt restructuring, the company eliminated around $1.7 billion in debt and extended the company's debt maturity profile, reducing cash annual interest expense by $120 million from previous $322 million. The transaction reduced Digicel's gross debt by 34% to $3.1 billion and its leverage (gross debt /EBITDA, as adjusted by Moody's) declined to around 4.5x from 7.9x as of September 2023. The transaction allowed: 1) holders of DIFL's secured debt to extended maturity on first lien debt to 2027 from 2024; 2) exchange senior unsecured debt at DIFL with new senior unsecured notes issued by a new Hold Co; 3) exchange DL's senior unsecured notes and DIFL subordinated notes for Digicel Holdings (Bermuda) Limited common equity, and 4) allocate existing cash, the right to future Digicel Pacific Limited (DPL) sale proceeds and other remaining DGHL assets to, among others, DGHL holders of the senior unsecured notes , DGHL holders of the convertible notes, Digicel Holdings (Bermuda) Limited and the supporting shareholder and convertible notes. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the review for upgrade, downward ratings pressure is currently not expected, but Moody's could confirm Digicel's ratings should the company's liquidity deteriorate or if there's little visibility into the company's financial strategy and policies. LIST OF AFFECTED RATINGS Issuer: Digicel Group Holdings Limited Withdrawals: Corporate Family Rating, Withdrawn, previously rated Caa2 Probability of Default Rating, Withdrawn, previously rated Caa2-PD Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated Ca Outlook Actions: Outlook, Changed To Rating Withdrawn From Negative Issuer: Digicel International Finance Limited Assignments: Corporate Family Rating, Assigned Caa1; Placed Under Review for further Upgrade On Review for Upgrade: Senior Secured Bank Credit Facility, Placed on Review for Upgrade, currently Caa1 Senior Secured Regular Bond/Debenture, Placed on Review for Upgrade, currently Caa1 Withdrawals: Subordinate Regular Bond/Debenture, Withdrawn, previously rated Caa3 Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated Caa3 Outlook Actions: Outlook, Changed To Rating Under Review From Negative Issuer: Digicel Group Two Limited Withdrawals: Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated C Outlook Actions: Outlook, Changed To Rating Withdrawn From Negative Issuer: Digicel Limited Withdrawals: Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated Caa3 Outlook Actions: Outlook, Changed To Rating Withdrawn From Negative The principal methodology used in these ratings was Telecommunications Service Providers published in November 2023. Incorporated in Hamilton, Bermuda, Digicel International Finance Limited (Digicel) is the largest provider of wireless telecommunication services in the Caribbean. Following the sale of DPL on July 14, 2022 and the exit from Panama, the company operates in 25 markets in the Caribbean. Digicel provides a comprehensive range of business solutions, cable TV and broadband, and other related products and services. Digicel generated revenue of $1.8 billion for the last twelve months that ended September 2023. =========== B R A Z I L =========== BRASKEM SA: S&P Lowers Global Scale ICR to 'BB+', Outlook Stable ---------------------------------------------------------------- S&P Global Ratings lowered its global scale issuer credit rating (ICR) on Braskem S.A. to 'BB+' from 'BBB-'. S&P also lowered its issue-level ratings on the company's senior unsecured notes to 'BB+' from 'BBB-' and on its subordinated notes to 'B+' from 'BB'. S&P said, "Given the drop in the ICR to 'BB+', we assigned a '3' recovery rating to the company's senior unsecured issue-level ratings, indicating our expectation for meaningful recovery (50-70%; rounded estimate: 60%) in a simulated default scenario. "At the same time, we affirmed our national scale ICR on Braskem at 'brAAA/Stable/--' and the ratings on its debentures at 'brAAA'. "The stable outlook reflects our expectation that Braskem will reduce leverage close to or below 4.0x by 2025. "With uncertainties over global economic growth and global petrochemical capacity additions and eventual shutdowns, we're now assuming a slower rebound of petrochemical spreads. This would lead to Braskem's weaker-than-expected profitability, despite management's measures to cut costs and expenses and optimize operating cash flow. Also, given the company's preliminary data for production and sales volumes in the fourth quarter of 2023 and realized spreads, we now forecast S&P-adjusted debt to EBITDA of 9.0x-9.5x for fiscal 2023. "With our weaker starting point as of the end of 2023 and challenging industry conditions, we now forecast Braskem's debt to EBITDA at 4.0x-4.5x in 2024 and close to 4.0x in 2025, a significant gap from our previous expectations of 3.0x-3.5x in 2024 and below 3.0x in 2025. This led to a change in our assessment of the company's financial risk profile to aggressive from significant." The company's has met its leverage target of 2.5x across industry cycles over many years, although not recently amid the uncommonly prolonged weak industry conditions. The current industry downturn also hit Braskem harder than global peers that use ethane as the main ethylene input, because of Braskem's much larger exposure to naphtha. The combination of somewhat stronger spreads and management's successful countercyclical actions could lead to lower leverage than our base-case forecast. But S&P can't confidently include these factors in its base-case assumptions given significant uncertainties over industry trends. Still, management's track record--along with the company's large scale, geographic diversification, sound market position in Brazil, and financial flexibility--are credit differentiators, in our view, from lower rated companies, which led S&P's to apply a positive comparable rating analysis score. Environmental factors are a negative consideration in our credit rating analysis of Braskem. Producers of petrochemicals and thermoplastics are among the most intensive CO2 emissions producers. Brazilian authorities claimed that Braskem's rock salt extraction caused geological damage in the state of Alagoas. The company provisioned R$14.4 billion (more than 40% of its debt as of December 2019) to shut down the salt extraction operation, relocate the affected families, and for socio-environmental expenses. In December 2023, there were atypical soil movements in the region, increasing risks of a sinkhole. The soil movements ceased after some weeks, with only a partial collapse in the affected cavity. Also, a Parliamentary Commission of Inquiry was recently established to investigate Braskem's responsibility in the geological damage. S&P currently believe that company's signed agreements with various authorities over the past few years should cover any penalties stemming from the investigation, but it continues to monitor these types of emerging risks. The company also had to sign a leniency agreement following a corruption investigation, which resulted in a R$3.1 billion fine in 2016. As part of that agreement, Braskem went through several internal control and governance changes that S&P believes improved the company's governance. However, governance factors are a moderately negative factor in our credit rating analysis of the company. On the positive side, Braskem aims to achieve carbon neutrality by 2050 and reduce GHG emissions (scopes 1 and 2) by 15% by 2030 from the average of the 2018-2020 level. This would be done through higher consumption of renewable energy and efficient energy projects. Also, the company recently expanded its production of green ethylene, made from sugarcane ethanol, to produce PE. Through an investment of $87 million, it increased from 200,000 tons per year to 260,000 tons of green ethylene per year. This product still represents only close to 1% of total production, but Braskem has a target to increase capacity to 1 million tons by 2030. GOL LINHAS: Seeks to Hire Milbank LLP as Bankruptcy Counsel ----------------------------------------------------------- GOL Linhas Aereas Inteligentes S.A. seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Milbank LLP as its counsel. The firm's services include: a. advising the Debtors in connection with a restructuring of the Debtors' financial obligations, including negotiations with the Debtors' creditors and other stakeholders, and other legal services related to a restructuring of the Debtors' financial obligations; b. advising the Debtors with respect to their rights, powers, and duties as debtors-in-possession in the operation of their business and the management of their properties; c. advising and consulting on the conduct of these cases, including the legal and administrative requirements of operating in chapter 11; d. advising the Debtors and taking all necessary or appropriate actions at the Debtors' direction with respect to protecting and preserving the Debtors' estates, including defense of any actions commenced against the Debtors, resolution of disputes in which the Debtors are involved, objecting to claims asserted against the Debtors, attending meetings, and negotiating with parties in interest, including governmental authorities, as necessary; e. providing advice, representation, and preparation of necessary documentation and pleadings and taking all necessary or appropriate actions in connection with statutory bankruptcy issues, strategic transactions, asset sale transactions, real estate, intellectual property, employee benefits, business and commercial litigation, regulatory, corporate and tax matters, and prosecution and settlement of claims both against and by the Debtors; f. advising the Debtors in connection with a possible sale of all or substantially all or a subset of the Debtors' assets in chapter 11 and similar or related transactions; g. drafting all necessary or appropriate pleadings necessary or otherwise beneficial to the administration of the Debtors' estates; h. representing the Debtors in connection with obtaining authority to continue using cash collateral and postpetition financing; i. advising the Debtors concerning assumptions, assignments, and rejections of executory contracts and unexpired leases; j. appearing before the Court and any appellate courts to represent the interests of the Debtors' estates; k. advising the Debtors regarding tax matters; l. taking all necessary or appropriate actions as may be required in connection with the administration of the Debtors' estates, including with respect to a chapter 11 plan and related disclosure statement; and m. performing all other legal services in connection with these Chapter 11 Cases as may be requested by the Debtors, including, without limitation, any general corporate legal services. The firm will be paid at these rates: Partners $1,695 to $2,245 Counsel $1,575 to $1,795 Associates $595 to $1,475 Legal Assistants $330 to $530 Milbank received payments from the Debtors totaling $13,380,135.55, including a retainer in the original amount of $1,000,000 and thereafter increased to $1,600,000 Consistent with the U.S. Trustee Guidelines, Milbank provides the following information in further support of the Application: Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: Milbank did not agree to a variation of its standard or customary billing arrangements for this engagement. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: None of Milbank's professionals included in this engagement has varied their rate based on the geographic location of these cases. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed postpetition, explain the difference and the reasons for the difference. Response: Milbank represented the Debtors in the twelve months prior to the Petition Date. The billing rates and material financial terms in connection with such representation have not changed postpetition, other than due to annual and customary firm-wide adjustments to Milbank's hourly rates in the ordinary course of Milbank's business; and Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: The Debtors and Milbank intend to develop a prospective budget and staffing plan in a reasonable effort to comply with the U.S. Trustee's requests for information and additional disclosures. Consistent with the U.S. Trustee Guidelines, the budget may be amended as necessary to reflect changed or unanticipated developments. Evan Fleck, a partner at Milbank, disclosed in court filings that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Evan R. Fleck, Esq Lauren C. Doyle, Esq. Bryan V. Uelk, Esq. MILBANK LLP 55 Hudson Yards New York, NY 10001 Telephone: (212) 530-5000 Facsimile: (212) 530-5219 Email: ldoyle@milbank.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. PETROBRAS: Has $1.7 Billion Oil Drilling Eco-Initiative ------------------------------------------------------- Richard Mann at Rio Times Online reports that in a new development, Petrobras is launching a $1.7 billion project to reinject CO2 from oil extraction back underground. This technology is making the drilling process cleaner and more innovative, according to Rio Times Online. This initiative, set to unfold in the Mero field within the Santos Basin, leverages the modern High-Pressure Separator (Hisep) technology for efficient gas handling, the report notes. This investment, stretching from research initiation in 2014 to the pilot's start in mid-2028, aims to address the environmental challenge posed by CO2 release during oil production, the report relays. About Petrobras Petroleo Brasileiro S.A. or Petrobras (in English, Brazilian Petroleum Corporation - Petrobras) is a semi-public Brazilian multinational corporation in the petroleum industry headquartered in Rio de Janeiro, Brazil. Petrobras control significant oil and energy assets in 16 countries in Africa, the Americas, Europe and Asia. But, Brazil represents majority of its production. The Brazilian government directly owns 54% of Petrobras' common shares with voting rights, while the Brazilian Development Bank and Brazil's Sovereign Wealth Fund (Fundo Soberano) each control 5%, bringing the State's direct and indirect ownership to 64%. A corruption scandal was uncovered in 2014 that involved Petrobras. The scandal related to money laundering that involved Petrobras executives. The executives were alleged to get received kickbacks from overpriced contracts, to the tune of about $3 billion in total. Over a thousand warrants were issued against politicians and businessmen in relation to the scandal. In 2016, Marcelo Odebrecht, CEO of Odebrecht, was sentenced to 19 years in prison after being convicted of paying more than $30 million in bribes to Petrobras executives. In January 2018, Petrobras agreed to pay $2.95 billion to settle a U.S. class action corruption lawsuit. In September 2018, Petrobras agreed to pay $853.2 million to settle with Brazilian and U.S. authorities. In July 2022, Fitch Ratings affirmed Petrobras' BB- Long-Term Issuer Default Rating. In addition, Fitch has revised the Rating Outlook to Stable from Negative following a similar revision to Brazil's Sovereign Rating Outlook. Also in July 2022, Egan-Jones Ratings Company upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Petrobras to BB+ from BB. In January 2024, S&P Global Ratings assigned a new management & governance (M&G) assessment of moderately negative to Brazil-based Petroleo Brasileiro S.A. - Petrobras. At the same time, S&P has affirmed its issuer credit ratings on Petrobras at 'BB' on the global scale and 'brAAA' on the Brazilian national scale. S&P has also affirmed its issue-level ratings on the company, and removed all its ratings from under criteria observation (UCO). =========================== C A Y M A N I S L A N D S =========================== OTEL SUKUK: Fitch Assigns 'BB+' Rating on Senior Unsecured Certs ---------------------------------------------------------------- Fitch Ratings has assigned Oman Telecommunications Company S.A.O.G.'s (Omantel, BB+/Stable) USD500 million senior unsecured trust certificates a final 'BB+' rating with a Recovery Rating of 'RR4'. The sukuk were issued through the trustee, Otel Sukuk Limited (OSL). Oztel Holdings SPC Limited (Oztel) will act as guarantor to all of Omantel's obligations under the transaction documents. The instruments were priced at 5.375% maturing in January 2031. The ratings are in line with Omantel's Long-Term Issuer Default Rating (IDR) and senior unsecured rating. OSL is an exempted company with limited liability incorporated in the Cayman Islands and has been incorporated solely for the purpose of participating in the transactions contemplated by the transaction documents to which it is a party. Its shares are held by Walkers Fiduciary Limited as share trustee. Omantel is the obligor, seller, buyer and service agent. Fitch understands from management that Omantel will use the proceeds for general corporate purposes, including the repayment of its bridge loan facility. KEY RATING DRIVERS The trust certificates' rating is aligned with the IDR of the ultimate parent and guarantor. This reflects Fitch's view that default of these senior unsecured obligations would reflect a default of Omantel in accordance with the agency's rating definitions. Fitch has given no consideration to any underlying assets or any collateral provided, as it believes the trustee's ability to satisfy payments due on the certificates ultimately depends on Omantel satisfying its unsecured payments obligations to the trustee under the transaction documents. In addition to Omantel's propensity to ensure repayment of the sukuk, in Fitch's view, Omantel is required to ensure full and timely repayment of OSL's obligations, due to its various roles and obligations under the sukuk structure and documentation, especially but not limited to the below features: - Pursuant to the service agency agreement, the sale of broadband data services at the minimum sale price will be sufficient to fund the periodic distribution amounts payable by the trustee in respect of the relevant certificates. If it is not sufficient and there is a sales shortfall during any distribution period, the agent will transfer any available funds from a reserve account or if unavailable, Omantel will pay the sales shortfall to the trustee by way of indemnity after tax. - On any dissolution or default event, the exercise price, relevant amount, and the required amount will become immediately due and payable; and the trustee will have the right under the purchase undertaking to require Omantel to purchase all of its rights, titles, interests, benefits and entitlements, present and future, into and under the relevant broadband data services. These are intended to fund the dissolution amount payable by the trustee under the trust certificates. The dissolution amount should equal the sum of the outstanding face amount of the certificate; and any due and unpaid periodic distribution amounts for such certificates. - The payment obligations of Omantel under the service agency agreement and purchase undertaking, are direct, unconditional, unsubordinated, and unsecured obligations, and at all the times will rank at least pari passu with all other present and future unsecured and unsubordinated obligations of Omantel. Furthermore, Oztel guarantees Omantel's obligations under the offering on a senior unsecured basis, ranking them pari passu with Omantel's existing debt obligations. - Additionally, Oztel has agreed to unconditionally and irrevocably guarantee all Omantel's payment obligations under the transaction documents to which the obligor is a party. To the extent that Omantel does not pay any sum payable by it under the transaction documents by the time and on the date specified for the payment, the guarantor will pay that sum as directed. The obligations of the guarantor under the guarantee will be direct, unconditional, unsubordinated and unsecured obligations, which at all times rank at least equally with all other present and future unsecured and unsubordinated obligations of the guarantor. - The sukuk includes a negative pledge provision, obligor event, change-of-control clause and a cross-acceleration clause. The transaction documents are governed by English law. Fitch does not express an opinion on whether the relevant transaction documents are enforceable under any applicable law. However, Fitch's rating on the certificates reflects the agency's belief that Omantel would stand behind its obligations. Fitch does not express an opinion on the certificates' compliance with sharia principles when assigning ratings to the certificates. DERIVATION SUMMARY The sukuk's rating is derived from the guarantor's Long-Term IDR. RATING SENSITIVITIES OSL Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - An upgrade of Omantel's IDR would lead to an upgrade of the certificates' rating Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - A downgrade of Omantel's IDR would lead to a downgrade of the certificates' rating. The certificates' rating may also be sensitive to adverse changes to the roles and obligations of Omantel and Oztel under the sukuk's structure and documents Omantel Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - The rating is capped by the Oman sovereign rating. Positive rating action on Oman would be mirrored on Omantel, provided Omantel's Standalone Credit Proile (SCP) is at the same level or higher than the sovereign rating, and links between the government and Omantel remain strong - An upwards revision of the SCP would be possible if the company can maintain its current market share and average revenue per user in an increasingly competitive environment. It is also contingent on Fitch-defined net debt/EBITDA on a deconsolidated basis remaining below 3.6x on a sustained basis without any deterioration in free cash flow (FCF) Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - Negative sovereign rating action, provided links between the sovereign and Omantel do not weaken The below factors could lead to a lowering of the SCP but not necessarily a downgrade of Omantel's IDR: - Pressure on FCF driven by EBITDA margin erosion, consistently higher capex and shareholder distributions, or significant underperformance in the core domestic market and at other key subsidiaries - Fitch-defined net debt/EBITDA on a deconsolidated basis sustained above 4.1x as a result of M&A, significant reduction in dividends from Zain Group and weakness in domestic FCF without remedial action from the company LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity: Omantel's cash balance at end-1H23 was OMR53 million and largely unrestricted with access to an undrawn OMR235 million revolving credit facility. Liquidity is supported by a steady sufficient dividend flow from Zain Group to meet interest expenses. Omantel's short-term liquidity has significantly improved following the sale of towers in Oman and the IPO of its headquarters. ISSUER PROFILE Omantel is the incumbent telecom operator in the Sultanate of Oman. The company owns national fixed and mobile telecoms infrastructure as well as regional undersea cable infrastructure which it wholesales to other international operators. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The instrument ratings are linked to Omantel's ratings due to its role as seller under the purchase agreement, obligor, and service agent. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This 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 of the materiality and relevance of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Otel Sukuk Limited senior unsecured LT BB+ New Rating RR4 BB+(EXP) ===================== P U E R T O R I C O ===================== DISTRIBUIDORA NARANJITO: Case Summary & 17 Unsecured Creditors -------------------------------------------------------------- Debtor: Distribuidora Naranjito Import & Export Corp. BO Pajaros Americanos Carr 863 Int. Carr. 861 Bayamon, PR 00957 Case No.: 24-00711 Chapter 11 Petition Date: February 26, 2024 Court: United States Bankruptcy Court District of Puerto Rico Debtor's Counsel: Modesto Bigas-Mendez, Esq. MODESTO BIGAS LAW OFFICE PO Box 7462 Ponce, PR 00732 Tel: (787) 844-1444 Fax: (787) 842-4090 Email: modestobigas@yahoo.com Total Assets: $1,039,957 Total Liabilities: $2,352,350 The petition was signed by Osmar A. Aymat Rivera as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 17 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SAQWVHY/DISTRIBUIDORA_NARANJITO_IMPORT__prbke-24-00711__0001.0.pdf?mcid=tGE4TAMA ===================================== S T . K I T T S A N D N E V I S ===================================== ST. KITTS & NEVIS: Shows Progress in Climate Adaptation, IMF Says ----------------------------------------------------------------- IMF Deputy Managing Director Bo Li visited St. Kitts and Nevis from February 14-16, where he met Prime Minister Terrance Drew and held meetings with Governor Timothy Antoine, Chairman Camillo Gonsalves, and the members of the Eastern Caribbean Central Bank (ECCB) Monetary Council. At the conclusion of his trip, Mr. Bo Li issued the following statement: "I would like to thank Prime Minister Terrance Drew and the members of the ECCB Monetary Council for their warm welcome and constructive discussions on the economic prospects of St. Kitts and Nevis. During our engagements, I welcomed the potential benefits of the country's large renewable energy resources and ongoing policy initiatives to build a sustainable and resilient island nation. "The existential threat of climate change is acutely felt in the Caribbean. At the same time, the region has large renewable energy potential. The immense challenges and opportunities involved in climate adaptation and mitigation require a holistic set of climate policies, while ensuring that strong public finance and debt sustainability policies are in place. "I want to underscore the strong progress that has been made by St. Kitts and Nevis on climate adaptation and building resilience. Let me also reiterate that the IMF is committed to supporting ECCU member countries, including through policy advice, capacity development, and lending through the Resilience and Sustainability Trust (RST). "Adaptation investments and the green energy transition require affordable, sustainable, and significant financing. The Caribbean region can benefit from greater collaboration among multilateral development banks, international financial institutions, and bilateral donors to help crowd in private climate finance.” The Honourable Dr. Terrance Drew, Prime Minister of St. Kitts and Nevis and Chairman of the Organisation of Eastern Caribbean States (OECS) proudly embraced the opportunity to forge a deeper partnership with the IMF in advancing the collective developmental aspirations of the Federation of St. Kitts and Nevis and the OECS. "The Government of St. Kitts and Nevis welcomes the opportunity to deepen our relationship with the IMF in advancing the development goals of the OECS through practical solutions to our current and emerging developmental challenges. We must emphasize the importance of regional collaboration. Pooling our resources and leveraging our combined population base can make investments more attractive to private sector entities. I extend my sincere appreciation to Director Bo Li for demonstrating such keen interest in our region and for committing to assisting us in tackling our challenges. Being at the forefront of discussions and practical proposals will enable us to craft practical solutions that yield tangible results." The Chairman of the ECCB Monetary Council Honorable Camillo Gonsalves underscored the imperative to accelerate climate adaptation efforts and explore avenues to secure the financial resources needed. Chairman Gonsalves stated: "I am pleased with the constructive and candid exchange of views during the Monetary Council's engagement with the IMF Deputy Managing Director, Mr. Bo Li. It is heartening to see the level of care and attention being accorded by the Fund to the affairs of the Currency Union in recent times. The Fund has been exhibiting an awareness of and sensitivity to some of the challenges that the smallest and most vulnerable in the Caribbean and the world face on our development journey. The developmental headwinds that the countries in the region face are well-known – chief among them being vulnerability. In understanding where we are developmentally and structurally, we first need to address the issue of our vulnerability. "I believe there is more that can be done to address these challenges. We need to place the issue of climate finance and adaptation front and center. I thank Deputy Managing Director Li for his gracious offer to collaborate with the region on two points: (i) renewable energy - through support for the ECCB's Renewable Energy Infrastructure Investment Facility; and (ii) to use the Fund's convening power to help shine a light on adaptation finance. The adaptation challenges of the region are acute and cannot be financed through the paltry sums currently available. The Monetary Council is grateful for this engagement and looks forward to continuing our collaboration on climate finance.” ********* 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 * * *