12/05/2008 10h32
Weak Real opens opportunities in Brazil, says Goldman Sachs
Valor Econômico - 12/05/2008
The increase in the US Dollar rate - 62% since its minimum level in the year - changes the game in the market of fusions and acquisitions in Brazil. Brazilian companies suddenly go from buyers to targets of acquisitions, alerts Gary Cohn, International Co-President of Goldman Sachs. "When I was here in Brazil, six months ago, I met the 20 largest companies of the country and all of them wanted to buy assets outside the country", he said. "Now, we have the same companies searching for potential foreign investors", he revealed. For Goldman Sachs - world leader in the market of fusions and acquisitions and sixth in the Brazilian market until November this year, according to Thompson Reuters -, this is an opportunity. Terrorism, political or geopolitical disorders in other emerging countries make investors turn their attention to opportunities in Brazil, "a more stable country", even more. Cohn remembered that "every type of asset" is in an abrupt price fall, from shares to government securities, commodities, and even real estate and that this devaluation continues and deepens with the shortage of credit. "Our assets in Brazil were also affected by the current setting of shortage of financing", he confirmed. "But, should you have credit availability, for leverage, these assets in Brazil would be interesting", he said. When credit returns, prices will go up again and Goldman Sachs may have strong profits, he said. However, he does not rule out new lows in the next quarters, before the recovery. In Brazil, among other investments, Goldman Sachs has 15% of the interest of Santelisa Vale, in Sertãozinho (SP), the third largest sugar and alcohol group of the country, which renegotiates debts of US$ 300 million. It also has minority interest in the BRA airline, which is not operating since the end of 2007 and is in judicial recovery, with a debt of R$ 200 million, the greatest part with banks. The bank is also creditor of Braspelco, in default since the beginning of 2006 and with a debt of US$ 200 million. Besides that, Goldman Sachs is one of the 12 creditors of Aracruz in derivatives and is taking part in the renegotiation of the total debt of US$ 2.1 billion. As part of the cut in 10% in the total of employees world-wide, Goldman also reduced its personnel in Brazil and in Latin America. But at slightly smaller proportions than in the world. In spite of that, Cohn affirms it continues expanding business in Brazil and "in every country we consider as the future dominant economies".
