SAO PAULO May 9 The Brazilian government plans
to change the bankruptcy law to help indebted firms emerge
faster from creditor protection, Finance Minister Henrique
Meirelles told a newspaper.
The changes would reduce the average length of bankruptcy
protection to two years, compared to between seven and eight
years currently, he said in an interview published on Tuesday in
the O Estado de S.Paulo newspaper.
Bankers and lawyers expect bankruptcies to set a record in
2017, with tight credit and the lingering recession forcing a
growing number of large Brazilian companies to seek protection
The bill, which will be submitted to Congress in June, would
make it easier for companies under creditor protection to
maintain operations and borrow funds, according to the article.
It would also grant creditors stronger power in the
discussions, Meirelles added, without providing further details.
That is the latest in a wide series of microeconomic reforms
proposed by President Michel Temer's administration to lift
Latin America's largest economy from its deepest recession in
decades and secure steady growth from then on.
Together with ongoing plans to streamline the social
security system, reform labor laws and other efforts, those
changes would allow Brazil's gross domestic product (GDP) to
expand at a 3.5 percent to 4 percent annual pace without
accelerating inflation, Meirelles said.
Currently, so-called potential growth stands at between 2
percent and 2.25 percent, he said.
Press representatives from the Finance Ministry were not
immediately available to comment on the report.
Major firms, such as wireless carrier Oi SA
and homebuilder PDG Realty SA, have been
ensnared in thorny debt renegotiation talks after filing for
protection from creditors as years of robust economic growth
(Reporting by Bruno Federowski; Editing by Bernadette Baum)