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It’s been 27 years since an incumbent U.S. president lost re-election, and judging by the health of the economy and other traditional metrics, Donald Trump looks unlikely to break the trend.

In addition to presiding over sustained growth and low unemployment, Trump enjoys a nation at relative peace, a well-funded campaign and the strong backing of the Republican Party. And yet, as he prepares to formally kick off his 2020 re-election bid with a prime-time speech in Florida, he has reason to be circumspect, Shannon Pettypiece and Mike Dorning report.

Most private forecasters expect the economy to slow entering the election year, as U.S. trade disputes threaten global commerce — hurting core voters like farmers — and the fiscal stimulus from Trump’s 2018 tax cut fades.

Special Counsel Robert Mueller’s investigation into election meddling by Russia, alongside other controversies that have dogged Trump’s administration, are also potential liabilities.

Trump trails six of his Democratic rivals in hypothetical head-to-head contests, a poll showed last week. And no president since 1952 has been re-elected with an approval rating below 48%. Trump has not exceeded 46% in Gallup polls since taking office.

Much hinges on the Democrats. The question is whether they can select a challenger able to attract the funding and support in battleground states needed to deny Trump a second term.

Global Headlines

Iran under pressure | The Pentagon plans to send about 1,000 more troops to the Middle East, even as Trump described as “very minor” the recent attacks on two tankers in the Gulf of Oman that the U.S. has blamed on Iran. The Pentagon also released new photos and a timeline it said bolstered the case that Iran was behind the incidents. Tehran denies any involvement.

Click here to read how Trump’s campaign vow to get the U.S. out of costly foreign entanglements is colliding with the messy reality of commitments in the Middle East.

Trade turmoil | The chairwoman of the world’s biggest bicycle maker delivered an ominous message to China that its days as a global manufacturing hub may be numbered. Giant Manufacturing started rolling production of its U.S.-bound orders back home to Taiwan when Trump made his tariff threats last year, Cindy Wang reports. Trump’s top trade envoy, Robert Lighthizer, is due to appear before Congress this week to account for the trade conflict.

Scottish dilemma | Scots didn’t vote for Brexit and neither did they elect the Conservatives. So the likelihood of a Brexiteer such as Boris Johnson winning the race to succeed Theresa May as Tory leader and prime minister is forcing some hard choices north of the border. As Alan Crawford and Rodney Jefferson report, the sense in Edinburgh is that another referendum on Scottish independence is now inevitable.

As the Conservative field narrows further today, Alex Morales profiles Rory Stewart, the lesser-known candidate suddenly making waves.

Fall from grace | The holding company of the Brazilian construction and energy giant at the center of a massive Latin America graft probe has filed for bankruptcy protection. Odebrecht has struggled since the “Carwash” investigation, which started in 2014 and brought the construction industry to a halt as access to government projects was cut and executives jailed. The political fallout is still reverberating from Ecuador to Mexico, Peru and Brazil.

Waiting game | Democratic Republic of Congo President Felix Tshisekedi still hasn’t named a cabinet five months after taking office, leaving investors in the mineral-rich nation facing endless delays. After a disputed election, Tshisekedi’s protracted talks with his coalition partner have almost paralyzed a nation ranked by the World Bank as one of the most difficult and corrupt places to do business.

What to Watch

Hong Kong leader Carrie Lam today apologized for backing a bill to allow extraditions to China, as she seeks to defuse protests that have rocked the city. She declined to resign or withdraw the bill completely — key demands of protest leaders. Rights groups have urged a transparent probe into the death of Mohamed Mursi, the Muslim Brotherhood foot soldier who became Egypt’s first freely elected civilian president. He collapsed during a court hearing over an espionage case, with state-run media saying he suffered a “sudden heart attack.” Chancellor Angela Merkel’s candidate to head the European Commission — Manfred Weber, a German lawmaker in the European parliament — is struggling for momentum, which means she may need to instead focus on getting her preferred person into the European Central Bank’s top job. U.S. Secretary of State Michael Pompeo meets today with European Union foreign policy chief Federica Mogherini in Washington. Mogherini said yesterday the EU will not support Jared Kushner’s Middle East peace plan without a two-state solution included.

And finally…You used to catch only rare glimpses of them in public — a waiter willing to risk jail time might accept them for the right price, street hawkers making offers for them under their breath. Today, U.S. greenbacks are widely used in Venezuela’s supermarkets and bodegas. As Andrew Rosati reports, with the bolivar devalued into irrelevance by Nicolas Maduro’s regime, the cash printed by the gringos he rails against is king. 

 

–With assistance from Karl Maier and Jon Herskovitz.

To contact the author of this story: Kathleen Hunter in London at khunter9@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net, Alan Crawford

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FILE PHOTO: Hong Kong Chief Executive Carrie Lam attends a news conference in Hong Kong
FILE PHOTO: Hong Kong Chief Executive Carrie Lam looks down during a news conference in Hong Kong, China, June 15, 2019. REUTERS/Athit Perawongmetha

June 18, 2019

By Clare Jim and Noah Sin

HONG KONG (Reuters) – Hong Kong leader Carrie Lam on Tuesday signaled the end of a controversial extradition bill that she promoted and then postponed after some of the most violent protests since the former British colony returned to Chinese rule in 1997.

In a closely watched press conference, Lam apologized for the turmoil but refused to say whether the bill would be withdrawn, only that it wouldn’t be re-introduced during her time in office if public fears persist.

This was the strongest sign yet that the government was effectively shelving legislation that would allow people to be extradited to mainland China to face trial, even if it fell short of protester demands for the government to scrap the bill altogether.

“Because this bill over the past few months has caused so much anxiety, and worries and differences in opinion, I will not, this is an undertaking, I will not proceed again with this legislative exercise if these fears and anxieties cannot be adequately addressed,” Lam told reporters.

Lam, appearing both contrite and defiant, used much of the same language as a previous press conference on Saturday when she announced a postponement of the bill. A day later, about two million people spilled on to the streets, many demanding that she step down.

Lam, asked repeatedly whether she would quit, refused to do so, saying there remained important work ahead in the next “three years”, which would bring her to the end of her current five year term of office.

Lam apologized for plunging the city into major upheaval, saying she had heard the people “loud and clear” and would try to rebuild trust.

Lam’s climbdown, with the approval of China’s Communist Party leaders, was the biggest policy reversal since 1997 and presented a new challenge for Chinese President Xi Jinping who has ruled with an iron fist since taking power in 2012.

Since the proposed amendments to the Fugitives Offenders’ Ordinance were first put to the legislature in February, Lam has repeatedly rebuffed concerns voiced in many quarters, including business groups, lawyers, judges, and foreign governments against the bill.

Critics say the bill would undermine Hong Kong’s independent judiciary and rule of law, guaranteed by the “one country, two systems” formula under which Hong Kong returned to China, by extending China’s reach into the city and allowing individuals to be arbitrarily sent back to China where they couldn’t be guaranteed a fair trial.

Chinese courts are strictly controlled by the Communist Party.

Lam issued an apology on Sunday night through a written government statement that many people said lacked sincerity. It failed to pacify many marchers who said they no longer trusted her and doubted her ability to govern.

Lam, a career civil-servant known as “the fighter” for her straight-shooting and tough leadership style, took office two years ago pledging to heal a divided society. Some observers say she is unlikely to step down immediately but any longer-term political ambitions she may have harbored are now all but dead.

Many protest organizers say they will continue to hold street demonstrations until Lam scraps the bill, fearing that authorities may seek to revive the legislation in future when the public mood is calmer.

(Reporting by Clare Jim, Noah Sin, Twinnie Siu, Anne Marie Roantree and Hong Kong newsroom; Writing by James Pomfret; Editing by Nick Macfie)

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FILE PHOTO: Office buildings are pictured in the financial district of Frankfurt
FILE PHOTO: Office buildings are pictured in the financial district of Frankfurt, Germany, September 15, 2018. REUTERS/Ralph Orlowski/File Photo

June 18, 2019

BERLIN (Reuters) – The mood among German investors deteriorated sharply in June, a survey showed on Tuesday, with the ZEW institute pointing to recent weak economic data and an escalating trade dispute between China and the United States.

ZEW said its monthly survey showed economic sentiment among investors plunged to -21.1 from -2.1 in May. Economists had expected a drop to -5.9.

The June reading was the lowest level since November 2018 and marked the second consecutive monthly drop.

ZEW President Achim Wambach said the steep drop was linked to greater uncertainty about the global economy and a downturn in data on the German economy at the start of the second quarter.

“The intensification of the conflict between the U.S. and China, the increased risk of a military conflict in the Middle East and the higher probability of a no-deal Brexit are all casting a shade on the global economic outlook,” he added.

A separate gauge measuring investors’ assessment of the economy’s current conditions edged down to 7.8 from 8.2 the previous month. Markets had predicted a slightly lower reading of 6.0.

The weaker-than-expected sentiment survey adds to signs that German economic growth will be meager this year and that an expected rebound in 2020 could be less impressive than forecast.

Germany’s influential Ifo institute earlier on Tuesday cut its 2020 growth forecast to 1.7% from 1.8% previously as it warned that a manufacturing recession was starting to spill over into other sectors.

The government expects the economy to grow by 0.5% this year and 1.5% next.

(Reporting by Michael Nienaber; Editing by Michelle Martin)

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FILE PHOTO: Syrian Foreign Minister al-Moualem speaks during a meeting with Russian Foreign Minister Lavrov in Moscow
FILE PHOTO: Syrian Foreign Minister Walid al-Moualem speaks during a meeting with Russian Foreign Minister Sergei Lavrov in Moscow, Russia August 30, 2018. REUTERS/Maxim Shemetov

June 18, 2019

BEIJING (Reuters) – Syrian Foreign Minister Walid al-Moualem said on Tuesday that he does not want to see fighting between the Syrian and Turkish militaries.

Moualem made the comment in China during a joint briefing with the Chinese government’s top diplomat State Councillor Wang Yi.

(Reporting by Ben Blanchard; Writing by Michael Martina; Editing by Jacqueline Wong)

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A Rohingya refugee child looks at others studying at a makeshift madrasa at the Burma Para refugee camp near Cox's Bazar
A Rohingya refugee child looks at others studying at a makeshift madrasa at the Burma Para refugee camp near Cox’s Bazar, Bangladesh December 27, 2017. REUTERS/Marko Djurica

June 18, 2019

By Michelle Nichols

UNITED NATIONS (Reuters) – There was a “systemic failure” of the United Nations in dealing with the situation in Myanmar ahead of a deadly 2017 military crackdown because it did not have a unified strategy and lacked Security Council support, according to an internal report.

The crackdown drove more than 730,000 Rohingya Muslims to flee to Bangladesh. U.N. investigators have said the operation was executed with “genocidal intent” and included mass killings, gang rapes and widespread arson.

Myanmar denies widespread wrongdoing and says the military campaign across hundreds of villages in northern Rakhine was in response to attacks by Rohingya insurgents.

“Without question serious errors were committed and opportunities were lost in the U.N. system following a fragmented strategy rather than a common plan of action,” wrote former Guatemalan foreign minister and U.N. ambassador Gert Rosenthal in a 34-page internal review, seen by Reuters prior to its publication on Monday.

“The overall responsibility was of a collective character; in other words, it truly can be characterized as a systemic failure of the United Nations,” wrote Rosenthal, who was appointed by Secretary-General Antonio Guterres earlier this year to look at U.N. involvement in Myanmar from 2010 to 2018.

He said senior U.N. officials in New York could not agree on whether to take a more robust public approach with Myanmar or pursue quiet diplomacy and that conflicting reports on the situation were also sent to U.N. headquarters from the field.

The United Nations struggled to balance supporting the Myanmar government with development and humanitarian assistance, while also calling out the authorities over accusations of human rights violations, Rosenthal concluded.

“The United Nations system … has been relatively impotent to effectively work with the authorities of Myanmar to reverse the negative trends in the area of human rights and consolidate the positive trends in other areas,” he said.

“The United Nations’ collective membership, represented by the Security Council, bears part of that responsibility, by not providing enough support to the secretariat when such backing was and continues to be essential,” Rosenthal wrote.

The 15-member Security Council, which visited Myanmar’s Rakhine state last year, has been deadlocked with Myanmar allies China and Russia pitted against western states over how to deal with the situation.

Human Rights Watch said the report was disappointing, given the scale of the Rohingya crisis, for not identifying specific U.N. officials responsible for the failures.

“The report now looks increasingly like a check-the-box exercise by U.N. Secretary General Antonio Guterres, designed to show commitment to accountability when in reality it accomplishes exactly the opposite,” Phil Robertson, the group’s deputy director for Asia, said in a statement.

U.N. spokesman Stephane Dujarric said Rosenthal’s report was due to be sent to all 193 U.N. members states.

“Its conclusions and observations have been fully accepted by the Secretary-General, and he will work very closely with the senior leadership to make sure they’re implemented,” he said.

(Reporting by Michelle Nichols; additional reporting by Simon Lewis; Editing by Susan Thomas & Simon Cameron-Moore)

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FILE PHOTO: A pumpjack is seen at sunset outside Scheibenhard, near Strasbourg
FILE PHOTO: A pumpjack is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann

June 18, 2019

By Aaron Sheldrick

TOKYO (Reuters) – Oil prices were falling for a second day on Tuesday, after more signs that global economic growth is being hit by U.S.-China trade tensions, although losses were limited amid tensions in the Middle East after tanker attacks last week.

Brent crude futures were down 16 cents, or 0.3%, at $60.78 a barrel by 0215 GMT. They fell 1.7% in the previous session on concerns about slowing global growth.

U.S. West Texas Intermediate (WTI) crude futures were down 12 cents, or 0.2%, at $51.92. They dropped 1.1% on Monday.

The New York Federal Reserve said on Monday that its gauge of business growth in New York state posted a record fall this month to its weakest level in more than 2-1/2 years, suggesting an abrupt contraction in regional activity.

U.S. business sentiment has sagged as tensions over trade have escalated between China and the United States and on signs of softness in the labor market.

“The (oil) market is in a rut and desperately in need of some robust economic data to get it out of this funk,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok.

Oil prices have fallen around 20% since 2019 highs reached in April, in part due to concerns about the U.S.-China trade war and disappointing economic data.

U.S. President Donald Trump and China’s President Xi Jinping could meet at the G20 summit in Japan later this month. Trump has said he would meet Xi at the event, although China has not confirmed the meeting.

Putting further pressure on oil, the U.S. energy department said on Monday that shale oil output is expected to reach a record in July.

But tensions in the Middle East are likely to keep prices supported, analysts said.

Acting U.S. Defense Secretary Patrick Shanahan announced on Monday the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Fears of a confrontation between Iran and the United States have mounted since last Thursday when two oil tankers were attacked, which Washington has blamed on Tehran. Iran has denied involvement.

(Reporting by Aaron Sheldrick; Editing by Richard Pullin and Joseph Radford)

Source: OANN

A Huawei company logo is seen at the Shenzhen International Airport in Shenzhen in Shenzhen
A Huawei company logo is seen at the Shenzhen International Airport in Shenzhen in Shenzhen, Guangdong province, China June 17, 2019. REUTERS/Aly Song

June 18, 2019

By Sijia Jiang

HONG KONG (Reuters) – China’s Huawei Technologies Co Ltd has taken a harder-than-expected hit from a U.S. ban, the company’s founder and CEO Ren Zhengfei said, and slashed revenue expectations for the year.

Ren’s downbeat assessment that the ban will hit revenue by $30 billion, the first time Huawei has quantified the impact of the U.S. action, comes as a surprise after weeks of defiant comments from company executives who maintained Huawei was technologically self-sufficient.

The United States has put Huawei on an export blacklist citing national security issues, barring U.S. suppliers from selling to the world’s largest telecommunications equipment maker and No.2 maker of smartphones, without special approval.

The firm has denied its products pose a security threat.

The ban has forced companies, including Alphabet Inc’s Google and British chip designer ARM to limit or cease their relationships with the Chinese company.

Huawei had not expected that U.S. determination to “crack” the company would be “so strong and so pervasive”, Ren said, speaking at the company’s Shenzhen headquarters on Monday.

Two U.S. tech experts, George Gilder and Nicholas Negroponte, also joined the session.

“We did not expect they would attack us on so many aspects,” Ren said, adding he expects a revival in business in 2021.

“We cannot get components supply, cannot participate in many international organizations, cannot work closely with many universities, cannot use anything with U.S. components, and cannot even establish connection with networks that use such components.”

Huawei, which turned in a revenue of 721.2 billion yuan ($104 billion) last year, expects revenue of around $100 billion this year and the next, Ren said. This compares to an initial target for a growth in 2019 to between $125 billion and $130 billion depending on foreign exchange fluctuations.

TRADE WAR

The Trump administration slapped sanctions on Huawei at a time when U.S.-China trade talks hit rough waters, prompting assertions from China’s leaders about the country’s progress in achieving self-sufficiency in the key semiconductor business.

Huawei has also said it could roll out its Hongmeng operating system (OS), which is being tested, within nine months if needed, as its phones face being cut off from updates of Google’s Android OS in the wake of the ban.

But industry insiders have remained skeptical that Chinese chip makers can quickly meet the challenge of supplying Huawei’s needs and those of other domestic technology firms.

Negroponte, founder of the Massachusetts Institute of Technology Media Lab, said the U.S. ban was a mistake.

“Our president has already said publicly that he would reconsider Huawei if we can make a trade deal. So clearly that is not about national security,” he said.

“It is about something else,” Negroponte added.

Huawei’s smartphone sales have, however, been hit by the uncertainty. Ren said the firm’s international smartphone shipments plunged 40%. While he did not give the time period, a spokesman clarified the CEO was referring to the past month.

Bloomberg reported on Sunday that Huawei was preparing for a 40-60% drop in international smartphone shipments.

The CEO, however, said Huawei will not cut research and development spending despite the expected hit from the ban to the company’s finances and would not have large-scale layoffs.

($1 = 6.9239 Chinese yuan)

(Reporting by Sijia Jiang in Hong Kong and Brenda Goh in Shanghai; Writing by Sayantani Ghosh; Editing by Himani Sarkar and Muralikumar Anantharaman)

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FILE PHOTO: A woman rides a tricycle carrying a child near a residential compound in Beijing's Tongzhou district
FILE PHOTO: A woman rides a tricycle carrying a child near a residential compound in Beijing’s Tongzhou district, China, February 25, 2016. REUTERS/Jason Lee/File Photo

June 18, 2019

BEIJING (Reuters) – China’s new home prices rose 0.7% month-on-month in May, picking up the pace slightly from a 0.6% gain the previous month, Reuters calculated from National Bureau of Statistics (NBS) data published on Tuesday.

On a yearly basis, average new home prices in China’s 70 major cities increased 10.7% in May, unchanged from the growth rate in April.

China’s real estate market has shown signs of resurgence in recent months as some smaller cities quietly loosened curbs, and confidence has been lifted by Beijing’s call on banks to beef up lending and lower interest rates.

But a broader economic slowdown means the rebound might not be sustainable, some analysts caution, while official purchase restrictions in most cities are also expected to remain in place.

China’s property investment growth cooled in May and sales saw their biggest decline since October 2017, suggesting the frothy housing market may not be able to cushion the effects of a slumping manufacturing sector and intensifying trade tensions.

(Reporting by Beijing Monitoring Desk; Editing by Shri Navaratnam)

Source: OANN

A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing
A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing, Jiangsu province, China February 13, 2019. REUTERS/Stringer

June 18, 2019

By Shinichi Saoshiro

TOKYO (Reuters) – Investor caution ahead of the Federal Reserve’s interest rate meeting capped Asian stocks on Tuesday, while crude oil prices retreated as global growth worries overshadowed supply concerns stemming from recent Middle East tensions.

MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.05%.

Australian stocks added 0.1% while Japan’s Nikkei dipped 0.05%.

The Fed, facing fresh demands by U.S. President Donald Trump to cut interest rates, begins a two-day meeting later on Tuesday. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year.

Fresh hopes for looser U.S. monetary policy have been a tonic for risk assets markets, which were buffeted last month by an escalation in the trade conflict between Washington and Beijing. The S&P 500 has gained 5% this month after sliding in May on trade war fears.

Focus is now on how close the Fed could be to cutting interest rates amid the raging U.S.-China trade war, signs of the economy losing steam and pressure by President Trump to ease policy.

“The FOMC (Federal Open Market Committee) meeting is the week’s biggest event so there will be a degree of caution prevailing in the markets,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

“Expectations for a rate cut in July have increased significantly, so the markets could experience disappointment if the Fed does not send strong signals of impending easing.”

U.S. Treasury yields dipped on Monday after the New York Fed’s “Empire” gauge of business growth in the state showed a fall this month to its weakest in more than 2-1/2-years, fanning rate cut expectations.

The dollar index against a basket of six major currencies stood little changed at 97.507 after pulling back from a two-week high on the decline in Treasury yields.

The pound traded at $1.2542 after retreating overnight to a six-month low of $1.2532 on Monday on concerns that arch-Brexiteer Boris Johnson will replace Theresa May as prime minister. [GBP/]

The euro was a shade higher at $1.1224 after spending the previous day confined to a narrow range.

U.S. crude oil futures shed 0.08% to $51.89 per barrel after retreating 1.1% the previous day.

Oil prices had slipped on Monday as weak Chinese economic data released at the end of last week led to fears of lower global demand for the commodity. [O/R]

Concerns over weakening demand overshadowed tensions in the Middle East, which remained high following last week’s attacks on two oil tankers in the Gulf of Oman.

(This version of the story corrects typographical error in paragraph 5)

(Editing by Sam Holmes)

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FILE PHOTO: The corporate logo of Odebrecht is seen inside of one of its offices in Mexico City, Mexico
FILE PHOTO: The corporate logo of Odebrecht is seen inside of one of its offices in Mexico City, Mexico May 4, 2017. Picture taken on May 4, 2017. REUTERS/Carlos Jasso/File Photo

June 17, 2019

SAO PAULO (Reuters) – Brazilian conglomerate Odebrecht SA filed on Monday for bankruptcy protection, aiming to restructure 51 billion reais ($13 billion) of debt in what would be one of Latin America’s largest-ever in-court debt restructurings.

The bankruptcy filing comes after years of struggles for Odebrecht, the biggest of the Brazilian engineering groups caught in a sweeping political corruption investigation that has rippled across Latin America.

In the filing, the company asks the judge to bar the group’s seven largest creditors – six banks and an investment fund – from taking possession or selling shares in the group’s crown jewel, its controlling stake in petrochemical company Braskem SA.

Shares in Braskem are pledged as collateral to the creditors. But Odebrecht says the Braskem stake is essential to its restructuring, as the petrochemical company was responsible for nearly 80% of the conglomerate’s revenues in 2018.

Odebrecht said the bankruptcy protection was the best way to conclude its debt restructuring as creditors have sought to seize assets pledged as collateral for unpaid loans.

The debt restructuring relates to the parent company Odebrecht SA and a network of holding companies.

The group’s main operating businesses are excluded, including Braskem, construction unit OEC, oil company Ocyan, shipbuilder Enseada, Odebrecht Transport and homebuilder Incorporadora OR. Sugar and ethanol subsidiary Atvos Agroindustrial Participacoes SA, which already filed for a separate bankruptcy protection, is also excluded.

Odebrecht said its total debt reaches 98.5 billion reais, including intercompany loans and debt that is not subjected to in-court restructuring.

FALL FROM GRACE

Odebrecht expanded from its construction roots into one of Brazil’s biggest conglomerates but began its fall from grace in 2014, when it became a principal target of the country’s largest-ever corruption probe.

Former chief executive Marcelo Odebrecht, grandson of the founder, was arrested in 2015 and later sentenced to 19 years in jail for corruption. He has been under house arrest since 2017, barred from having any say in the company’s running.

In 2016, Odebrecht agreed to the world’s largest-ever corruption leniency fine with prosecutors in Brazil, the United States, and Switzerland, paying at least $3.5 billion. The scandal over bribes for public works contracts spread to other countries where Odebrecht did business, including Peru, Mexico, Argentina and Colombia.

Since then, the group has been selling assets to raise cash as borrowing costs climbed. It sold Brazilian sanitation company Odebrecht Ambiental to Canada’s Brookfield Asset Management for $800 million and Peruvian hydroelectric plant Chaglla to China Three Gorges Corporation for $1.4 billion.

Still, some of the group’s businesses have been forced to restructure debts as their revenues dwindled.

Odebrecht’s construction unit OEC is in talks to restructure $3 billion of debt with bondholders. The company proposed a 70% haircut, which was rejected by its creditors.

After a failed attempt to negotiate an out-of-court solution with its creditors, ethanol unit Atvos filed for bankruptcy protection in May.

Odebrecht had been negotiating a sale of Braskem to LyondellBasell Industries NV for a year and a half, but talks ended with no deal earlier this month.

The conglomerate’s largest creditors are Brazilian state-owned lenders Banco do Brasil SA, Caixa Economica Federal and BNDES, as well as private-sector lenders Banco Bradesco SA, Itaú Unibanco Holding SA, Banco Santander Brasil SA and an investment fund, totaling 33 billion reais in debt.

The group is being advised by financial restructuring firm RK Partners and law firm E. Munhoz Advogados.

(Reporting by Aluisio Alves, Carolina Mandl and Tatiana Bautzer; Editing by Brad Haynes and Rosalba O’Brien)

Source: OANN


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