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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, January 3, 2025, Vol. 26, No. 3
Headlines
B R A Z I L
123 MILHAS: Fights for Survival With $470MM Debt
BRAZIL: Lula's Embrace of New Central Banker Has Markets Wary
D O M I N I C A N R E P U B L I C
DOMINICAN REPUBLIC: No Setback in Growth Dynamics in 2024
J A M A I C A
JAMAICA: Fulton Again Calls for Agricultural Development Fund
MFS CAPITAL: Suspended From Trading
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B R A Z I L
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123 MILHAS: Fights for Survival With $470MM Debt
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Rio Times Online reports that Brazil's online travel industry faces
a seismic shift as 123 Milhas, once a rising star, files for
judicial recovery.
The company's $470 million (BRL 2.3 billion ) debt has left 800,000
creditors in limbo, including 600,000 consumers, according to Rio
Times Online. This crisis stems from a perfect storm of
post-pandemic market miscalculations and industry-wide challenges,
the report relates.
123 Milhas bet on falling airfares after COVID-19, but demand
surged instead, notes the report. Fuel costs spiked, currency
fluctuated, and airlines tightened loyalty programs. These factors
combined to crush the company's low-cost travel model, the report
discloses.
The recovery plan offers various repayment options to creditors,
the report relays. Proposals range from full payment after 12.5
years to a 40% discount with an 18-month grace period. An
innovative cashback system allows creditors to recoup 4-12% on new
purchases, potentially accelerating debt repayment, the report
notes.
This case will test Brazil's bankruptcy laws and recent reforms,
the report says. The outcome could reshape corporate restructuring
approaches nationwide. Industry watchers will scrutinize how 123
Milhas balances consumer protection with financial recovery, Rio
Times discloses.
The travel agency's struggles mirror broader sector challenges, the
report relays. Its fate may set a precedent for other companies
grappling with similar issues. This situation raises questions
about the viability of deeply discounted travel packages in
volatile markets, the report notes.
As 123 Milhas navigates this turbulence, the entire Brazilian
travel industry holds its breath. The company's ability to rebuild
trust and adapt its business model will be crucial for its survival
and the sector's recovery, adds the report.
BRAZIL: Lula's Embrace of New Central Banker Has Markets Wary
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Reuters reports that after months of rancor, ties between President
Luiz Inacio Lula da Silva and Brazil's central bank look poised for
an era of sweetness and light -- which is precisely what worries
some investors.
Gabriel Galipolo, 42, was set to take the reins at the bank Dec.
31, 2024, according to the report. The former deputy finance
minister has earned a reputation for economic views that sometimes
stray from his predecessor's embrace of free markets but warm the
hearts of left-leaning politicians, the report notes.
Specifically, concerns remain about a shift in monetary policy,
dating back to a split policy decision in May when Galipolo and
three other Lula appointees voted for a larger rate cut than the
Bolsonaro-appointed majority, notes Reuters.
Starting this month, Lula's picks will hold seven of the nine seats
on the central bank's rate-setting committee, or Copom, the report
relates. Despite the united front and hawkish rhetoric from
Galipolo, who has pledged independence from Lula, some economists
say the market remains unconvinced.
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 was sworn in on January 1, 2023, as the 39th
president of Brazil, succeeding Jair Bolsonaro.
In October 2024, Moody's Ratings has upgraded the Government of
Brazil's long-term issuer and senior unsecured bond ratings to
Ba1 from Ba2, the senior unsecured shelf rating to (P)Ba1 from
(P)Ba2; and maintained the positive outlook.
S&P Global Ratings raised on Dec. 19, 2023, its long-term global
scale ratings on Brazil to 'BB' from 'BB-'. Fitch Ratings
affirmed on Dec. 15, 2023, Brazil's Long-Term Foreign-Currency
Issuer Default Rating (IDR) at 'BB' with a Stable Outlook.
DBRS' credit rating for Brazil was last reported at BB with
stable outlook at July 2023.
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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: No Setback in Growth Dynamics in 2024
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Dominican Today reports that the Economic Commission for Latin
America and the Caribbean (ECLAC), in its report on the Preliminary
Overview of Economies, pointed out that the Dominican Republic was
the only country that did not have setbacks in its growth dynamics
during 2024.
In its analysis of the economic behavior of the countries of the
region, the organization pointed out that the slowdown in economic
activity has been widespread in the countries of Central America
and Mexico assured that this will be maintained for the remainder
of 2024, according to Dominican Today.
"When considering the estimates of economic activity for the second
half of the year, it is observed that in all countries, except the
Dominican Republic, there are setbacks in growth dynamics during
the year," ECLAC analysts said, the report notes.
In this report, ECLAC pointed out that the Dominican economy's
growth projections at the end of 2024 are 5.2% and for 2025 4.6%,
the report discloses.
In terms of food price inflation, the Dominican Republic was among
the 22 countries that registered a decrease between 2023 and 2024,
with falls of more than five percentage points, the report relays.
These included Barbados, Belize, Colombia, Ecuador, Peru, Saint
Vincent and the Grenadines, Saint Lucia, Suriname, and Venezuela.
Contrary to these, Argentina, Bolivia, and Haiti showed increases
in inflation, with increases exceeding five percentage points, the
report says.
Likewise, the country was among 11 Latin American countries where
employment increased by 4% during the first half of the year, while
four experienced a contraction, the report notes.
Otro dato que ofrece el informe es que "el empleo en el sector
industrial aumento en 11 de los 15 paises con datos disponibles, y
se destacan incrementos superiores al 5% en Bolivia (Estado
Plurinacional de), el Paraguay y la Republica Dominicana, y caídas
de mas del 4% en la Argentina y Trinidad y Tabago," the report
relays.
Employment in the generation of basic services increased in most
countries for which data are available. Still, in particular,
Argentina, Costa Rica, and the Dominican Republic recorded more
than 10% increases between the first half of 2023 and the same
period in 2024, the report discloses. Likewise, the construction
sector in which it registered a growth of 6%, the report says.
ECLAC points out that employment in the area of financial and
business services also grew in the most countries with more than 6%
increases are Bolivia, Brazil, Chile, Nicaragua, Dominican
Republic, and Trinidad and Tobago, 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. Luis
Rodolfo
Abinader Corona is the current president of the nation.
Standard & Poor's credit rating for Dominican Republic was raised
to 'BB' in December 2022 with stable outlook. Moody's credit
rating for Dominican Republic was last set at Ba3 in August 2023
with the outlook changed to positive. Fitch, in December 2023,
affirmed the Dominican Republic's Long-Term Foreign-Currency
Issuer
Default Rating (IDR) at 'BB-' and revised the outlook to positive.
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J A M A I C A
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JAMAICA: Fulton Again Calls for Agricultural Development Fund
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RJR News reports that immediate past president of the Jamaica
Agricultural Society Lenworth Fulton is again calling for the
government to establish an Agricultural Development Fund, through
the imposition of a two per cent tariff on all imported food and
consumer goods.
He is recommending that the Fund be used to finance scientific and
infrastructural developments in the sector, according to RJR News.
The value of food and consumer goods imports surged to US$1.13
billion during the first eight months of 2024, the report recalls.
A two per cent tariff on that figure would yield US$22.6 million or
just over J$3.5 billion, adds the report.
About Jamaica
Jamaica is an island country situated in the Caribbean Sea. Jamaica
is an upper-middle income country with an economy heavily dependent
on tourism. Other major sectors of the Jamaican economy include
agriculture, mining, manufacturing, petroleum refining, financial
and insurance services.
In October 2023, Moody's upgraded the Government of Jamaica's
long-term issuer and senior unsecured ratings to B1 from B2, and
senior unsecured shelf rating to (P)B1 from (P)B2. The outlook has
been changed to positive from stable.
In September 2023, S&P Global Ratings raised its long-term foreign
and local currency sovereign credit ratings on Jamaica to 'BB-'
from 'B+', and affirmed its short-term foreign and local currency
sovereign credit ratings at 'B', with a stable outlook. In
September 2024, S&P affirmed 'BB-/B' sovereign ratings on Jamaica
and revised outlook to positive.
In March 2022, Fitch Ratings affirmed Jamaica's Long-Term Foreign
Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook
is Stable.
MFS CAPITAL: Suspended From Trading
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RJR News reports that the Jamaica Stock Exchange has announced the
immediate suspension of trading in the shares of MFS Capital
Partners Limited due to the company's failure to meet critical
financial reporting deadlines.
According to the JSE, MFS has not submitted its Audited Financial
Statements for the year ended June 30, 2024, which were due on
September 28, 2024, the report notes.
Additionally, the company has failed to provide its 1st Quarter
Unaudited Financial Statements for the period ended September 30,
2024, according to RJR News.
The suspension, effective December 31, 2024, is in line with the
JSE's Junior Market Rules, which mandate timely submission of both
audited annual financial statements and quarterly unaudited
financial statements, the report relays.
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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 2025. All rights reserved. ISSN 1529-2746.
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