Suitors Emerge for Citibanamex; Chile Awards Lithium Contracts

A roundup of Wednesday’s news from across Latin America

Bloomberg Línea
January 12, 2022 | 07:40 PM

Bloomberg Línea — Suitors have emerged for Banamex, after Citigroup announced earlier this week it plans to sell its Mexican subsidiary, and which include Banco Santander (BSMXB), Grupo Financiero Banorte (GFNORTEO) and Bank of Nova Scotia.

Chile’s government has awarded two out of five lithium production contracts up for grabs, to Chinese electric vehicle producer BYD and local mining company Servicios y Operaciones Mineras del Norte, despite calls by President-elect Gabriel Boric, who takes office in March, to postpone the process.

Following is a roundup of Wednesday’s news from our reporters across Latin America.

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Argentina

The board of directors of the Central Bank of Argentina has imposed a regulation that obligates financial institutions to set up reserve requirements of 100% of the funds deposited in payment service providers, better known as digital wallets. The cost of this measure in the case of MercadoLibre (MELI), which operates the MercadoPago digital wallet, could be as much as $50 million per year.

Alberto Ramos, an economist at Goldman Sachs, has expressed his pessimism regarding Argentina’s willingness to comply with any agreement reached with the IMF, saying “any agreement is destined to fail” as the country attempts to renegotiate its $44 billion loan with the lender taken out by the previous government.

According to Argentina’s Industrial Union (UIA), some 80,000 workers are failing to turn up for work daily because of the pandemic, and which is beginning to impact production, amid fears the absenteeism will deal a serious blow to the country’s already floundering economy.

Brazil

President Jair Bolsonaro said in an interview with news portal Gazeta Brasil that the Omicron variant, which is causing an uptick in Covid-19 cases in the country, is “a welcome variant”. “Some serious, studious people - and not linked to pharmaceuticals - say that Omicron is welcome and may signal the end of the pandemic,” he was quoted as saying.

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Brazilians’ concerns over unemployment and the latest Covid-19 outbreak continue to dent Jair Bolsonaro’s popularity, according to a poll, leaving former president Luiz Inácio Lula da Silva on track to win the presidential elections in October. According to a poll by the firms Genial and Quaest, 44% of Brazilians polled would vote for Lula compared to 23% who would reelect Bolsonaro.

Lula Da Silva in March 2021 after his conviction on corruption charges was annulled.dfd

Brazilian fintech TerraMagna has announced the completion of a $40 million financing round from SoftBank and ShiftCapital, marking SoftBank’s first agribusiness-related investment.

Chile

The Chilean government has moved forward with the bidding process for lithium production contracts in the north of the country, despite calls from President-elect Gabriel Boric to postpone the process. The government of President Sebastián Piñera awarded two of the five contracts on offer to Chinese electric vehicle producer BYD Co. Ltd. and local mining company Servicios y Operaciones Mineras del Norte.

Colombia

The Gilinski family’s takeover bid for Grupo Nutresa has been completed and the family will become the second largest shareholder of the food producer, purchasing 126.8 million shares, for which it will pay $977.7 million, handing it a 27.69% stake.

Telefónica Colombia has completed the sale of its fiber optic assets in Colombia to investment firm KKR for around $200 million, a deal that will give rise to a separate company valued at around $500 million.

Colombian coffee production dropped by 9% year-on-year in 2021, to 12.5 million 60kg sacks, while production in December alone fell by 21% compared with the same month of 2020, according to the country’s federation of coffee growers (FNC). Domestic consumption of coffee increased however, to 2.8kg per person per year, forcing the country to rely more heavily on coffee imports, according to a study by local market research firm Reinova.

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Ecuador

Tul, an app created for the sale and distribution of construction materials, obtained $181 million in a Series B investment round aimed at strengthening its operations in Ecuador, where it has already created more than 500 jobs. As a result of the capital injection, the company - which is already projected to become one of the next Latin American unicorns - will invest more than $15 million in the country.

L’Oréal Paris has partnered with Asertia Comercial in Ecuador to stake out its presence in the most important sales outlets in the country.

Mexico

A day after Citigroup (C) announced its plans to close the retail banking division of its Mexican subsidiary Citibanamex and sell the brand, a number of suitors have emerged. Banco Santander is among the banks exploring the possibility of acquiring the Banamex brand, along with Grupo Financiero Banorte and Bank of Nova Scotia.

Citibanamex could have a sale value of between $12.5 billion and $15.5 billion, according to Bank of America.

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Caranty, a Mexican startup that facilitates the sale and purchase of used cars, is preparing to expand to some of Mexico’s main cities, a market valued at $60 billion annually, and in which companies such as the unicorn Kavak already operate.

PUBLICIDAD

Inflation in Mexico could be below 5% this year, compared to the 7.36% total for 2021, according to two economists consulted by Bloomberg Línea.

Grupo Aeromexico (AEROMEX*), one of Mexico’s leading airlines, announced that it has received the support of a majority of creditors for its restructuring plan, as part of its Chapter 11 insolvency process.

Peru

The Peruvian sol continued to strengthen against the U.S. dollar on Wednesday, at 3,897 soles to the greenback on the interbank rate, one of the highest levels since July 2021, according to the Central Reserve Bank.

Venezuela

The Criminal Chamber of the National Court of Spain has rejected an appeal filed by Adrián Velásquez Figueroa, a former bodyguard of Venezuela’s late President Hugo Chávez, and who will be extradited to the United States to face money laundering charges.

Former bodyguard of Venezuela's late president Hugo Chávez, Adrián Velásquez Figueroa, pictured with his wife Claudia Díaz Guillén, who worked as Chávez's nurse.dfd

This is how the region’s markets and currencies closed on Wednesday, January 12: