Reuters: Bankruptcy News: Brazil's FGC struggles to lure bidders to Cruzeiro do Sul-report

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Brazil's FGC struggles to lure bidders to Cruzeiro do Sul-report Sep 12th 2012, 11:26 Wed Sep 12, 2012 7:26am EDT * Neither a formal bid nor debt accord reached so far * Cruzeiro do Sul, FGC have no comment on Valor report SAO PAULO, Sept 12 (Reuters) - The administrator of Brazilian bankrupt lender Banco Cruzeiro do Sul, which the central bank seized in June, failed to draw firm takeover bids only hours short of a deadline to liquidate the bank, according to local media reports on Wednesday. Privately owned FGC, which has run Cruzeiro do Sul at the behest of the central bank since June 4, so far has neither obtained the necessary approval to renegotiate $1.59 billion of debt with bondholders nor clinched a sale of the bank to a rival, Valor Econômico newspaper reported, citing two unnamed bankers with knowledge of the situation. None of the six lenders that showed initial interest in Cruzeiro do Sul sweetened their offers or indicated possible incentives that would make the sale more attractive to them, Valor said. Talks between the FGC and those banks had borne no fruit as of late last night, the paper said. One of the bankers told Valor that incentives, such as a guarantee that the FGC could cover any potential shortfall in Cruzeiro do Sul after the sale, could definitely improve the chances of a deal before midnight. A spokeswoman for Cruzeiro do Sul declined to comment on the story. Shares of the bank jumped 21 percent on Tuesday, on speculation that the FGC might have already struck an accord to sell it. Calls by Reuters to FGC Chairman Antônio Carlos Bueno were not immediately returned. The fund has until midnight on Wednesday to decide whether to liquidate the bank, sell it to a rival or extend the deadline. An announcement is expected early on Thursday. Failure to sell the lender could trigger the biggest bankruptcy in Brazil's financial industry since the intervention and liquidation of Banco Santos in 2005. Cruzeiro do Sul was put under the administration of the FGC until the end of the year after the central bank found accounting problems that led to a $1.3 billion shortfall. Link this Share this Digg this Email Reprints

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