LatinNews Consulting

Regional Business Review

United Airlines to buy into Avianca: Avianca Holdings (which operates in Colombia, Peru, Ecuador and the Caribbean) and Avianca Brasil say they are discussing a merger, which would also bring in United Airlines of the US as minority partner. Two brothers, Germán and José Efromovich, hold the controlling stakes respectively in Avianca Holdings and Avianca Brasil. Avianca Holdings carried 29.5m passengers in 2016, reporting US$1.1bn in net revenue and US$102.1m in net profit in Q316. Avianca Brazil is the fourth largest Brazilian carrier, reporting H116 revenue of BRL1.4bn (US$448m) and a loss of BRL142.5m (US$45.6m) in the same half year…
Of the many countries in Latin America plagued by corruption, Brazil clearly has stood out in the past 18 months. Transparency International and others believe that the situation in Venezuela, however, is also very serious; albeit in the absence of data it is almost impossible to know the true extent of the problem. Despite the US Department of Justice estimating that Brazil’s Odebrecht paid US$98 in bribes in Venezuela (the highest amount in any single country outside of Brazil), the Venezuelan authorities have been mute on the matter. Following Odebrecht’s record plea bargain deal in the US in December, Venezuela’s…
Panama is another Latin American country where the Odebrecht corruption scandal is having a negative impact on this year’s growth prospects. In its plea bargain deal with the US Department of Justice the company admitted paying US$59m in bribes to Panamanian government officials in 2010-2014. Kenia Porcell, a Panamanian prosecutor, opened a case file and said that Odebrecht had agreed to pay US$59m (an amount equivalent to the bribes paid) as an initial surety, pending the outcome of investigations. Unlike Peru, the Panamanian government has only formally banned Odebrecht from bidding for new government contracts and not issued a blanket…
The scene was set for Peruvian economic growth to accelerate this year. After a bunching of mining mega-projects in 2016, the job of firing up the economy in 2017 was set to pass to the US$7bn Gasoducto del Sur pipeline project, and to a number of other public-private partnership (PPP) transport infrastructure investment projects. But the eruption of the Odebrecht corruption scandal in Peru has put a spanner in the works. Economic growth forecasts for 2017 have begun to be reined in. As part of a December 2016 plea-bargain deal with prosecutors in the US, Brazil and Switzerland, the Brazilian…
Latin America remains one of the most corrupt regions in the world, according to the latest Global Corruption Perceptions Index (CPI), compiled annually by the Berlin-based NGO Transparency International. Yet as the past 18 months have demonstrated, public tolerance for the practice – and for the impunity that has allowed it to thrive unchecked – is falling right across the region. While the current fall-out from the major corruption scandals in Brazil has contributed to an unscheduled change of government there, and created widespread regional ripples, eventually the result of this painful upheaval should be more transparency and accountability, stronger…

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