Good morning! Today, we talk about how big Brazilian companies could miss out on Brazil’s recovery due to their high debts. Plus, how Brazil’s relationship with Iran is developing after the Middle Eastern country attacked U.S. bases in Iraq. And Bolsonaro refuses to “tax the sun.” (This newsletter is for premium subscribers only. Become one now!)
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Debts could see companies miss out on Brazil’s recovery
The number of Brazilian companies that have filed for court-supervised reorganization—similar to Chapter 11 in the U.S.—between May and October 2019 increased 18 percent when compared to the same time span in 2018. Not only are more companies in trouble, but their debts are higher, too. According to consultancy firm Alvarez & Marsal, companies in the top 20 of reorganization filings have debts adding up to BRL 242 billion—up 62 percent from December 2018.
Even excluding Odebrecht, the construction behemoth that skews the overall data, the debt growth of the top 20 would be 10 percent.
Why it matters. Half of the top 20 reorganization...