Reuters: Bankruptcy News: UPDATE 1-No bidders for Brazil's Cruzeiro as deadline looms-report

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UPDATE 1-No bidders for Brazil's Cruzeiro as deadline looms-report Sep 10th 2012, 16:07 Mon Sep 10, 2012 12:07pm EDT * Potential bidders failed to turn up, Valor says * Six banks had shown initial interest in lender * FGC could order Cruzeiro liquidation on Wednesday * Cruzeiro says does not know sources of reports SAO PAULO, Sept 10 (Reuters) - Banco Cruzeiro do Sul, the Brazilian consumer lender seized by the central bank in June, failed to receive firm takeover bids last week as concern over a potential liquidation is scaring clients and potential buyers alike, according to local media reports on Monday. None of the six lenders that showed initial interest in Cruzeiro do Sul turned up on Friday at the headquarters of the deposit guarantee fund FGC to make a firm bid, Valor Econômico newspaper said. The newspaper did not say how it obtained the information. The privately owned FGC is running Cruzeiro do Sul at the behest of the central bank. According to an unsourced report by O Estado de S. Paulo, the FGC extended the presentation of firm bids to Tuesday. In a statement, Cruzeiro do Sul said it did not know the source of the reports and added that it expects the FGC to make an announcement on Sept. 13 relates to the "ongoing financial clean-up of the bank." Calls made to Antônio Carlos Bueno, chairman of the FGC, were not immediately returned. Bueno said recently that the fund would decide on Sept. 12 whether to liquidate the bank or sell it to a rival. 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. Both FGC and Cruzeiro do Sul remain short of garnering the necessary support for a $1.59 billion bond repurchase plan ahead of Wednesday, the newspaper added. FGC has until Wednesday to win the approval of at least 90 percent of creditors to pass a 49.3 percent average discount on bond debt. Link this Share this Digg this Email Reprints

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