Corporate Brazil Is Moving Past Its Scandals

Corporate Brazil Is Moving Past Its Scandals

Chamber Articles Category: Economic News Post Date: 01/10/18 Source: Bloomberg By: Paula Sambo & Julia Leite
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Talk of a recovery abounds in corporate Brazil today.

Of course, what constitutes improvement for a sector crippled by a pay-for-play scandal and multi-year recession can seem tepid, even a bit curious, to the outside observer.

Mostly, investors seem to want closure, and companies are trying their best. Petrobras, the state-controlled oil giant at the heart of the Carwash probe, agreed to pay $2.95 billion to compensate U.S. investors who lost money amid the crisis; phone operator Oi SA is ending an 18-month battle with creditors by committing to a $19 billion debt restructuring plan; and the parent company of meatpacker JBS SA is in talks to reach a new leniency agreement to settle outstanding claims against the company.

These kinds of developments, when taken together, are helping convey that some of Brazil’s biggest corporations are finally putting the scandals behind them. Stocks are hitting new records almost daily, business confidence is at the highest since 2014 and, adding to the buoyant mood, the economy’s long-awaited rebound is starting to materialize.

“This year will be better than 2017,” said Jorge Simino, the chief investment officer at Funcesp, Brazil’s largest pension fund backed by private companies. “Companies are in a much better position after trimming personnel, becoming more efficient, bolstering their finances and completing liability management. They are going to make money.” Read Full Article