Brazil's BNDES Says Cos Seek Record $24B In Credit YTD
Dow Jones Newswires
NEW YORK -- Companies operating in Brazil have sought a record $24
billion in loans from development bank BNDES so far this year, a bank
official told Dow Jones Friday.
The figure already exceeds BNDES' disbursement budget of $17 billion
for 1998, according to Federico Kautz, privatization manager at BNDES.
"Applications are increasing very much in the infrastructure sector,
particularly in power projects," Kautz said during a telephone interview.
Kautz said that BNDES disbursements have been growing at a speedy
pace, from $3.2 billion lent in 1993, to current levels, fed by a privatization
process that has created a number of huge new private corporations.
"We don't lend to state-owned companies," Kautz said. "But now there
are a lot more private companies."
Brazil privatized several billion dollars' worth of distribution assets in the
past couple of years, and recently started the sale of generation
companies.
Furthermore, several greenfield projects have emerged to bring power and
natural gas from neighboring countries.
"Almost 80% of disbursements in infrastucture go for power projects,
particularly thermoelectric and also hydroelectric," Kautz added.
The funds-hungry power sector leaves little to telecommunications
companies, be it the newly privatized spinoffs of Telecomunicacoes
Brasileiras SA (TBR), or upstarts in the cellular sector.
Also vying for BNDES funds earmarked for infrastructure are telecom
equipment manufacturers who are betting on the sector's expansion in the
wake of the Telebras privatization.
Kautz said that companies operating in Brazil which have applied for
BNDES funds include Motorola Inc. (MOT), Ericsson SPA (I.ERC)
Lucent Technologies Inc. (LU), Canada's Nortel, controlled by Bell
Canada Interantional (BCICIF), and Finland's Nokia (NOKA).
However, the process can be lengthy. The official said that after an initial
application, if approved, companies must submit a second, more detailed
and technical application which if approved, goes before a credit
committee for final authorization and disbursement.
-By Margarita Palatnik; 201-938-2226;
margarita.palatnik@cor.dowjones.com
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