By Luciana Magalhaes SAO PAULO, March 10 (Reuters) – Brazilian lender BRB plans to request a 3.3 billion reais ($637.37 million) loan from Brazil’s credit guarantee fund, FGC, by the end of the month to support its capitalization efforts, according to a person familiar with the matter. BRB is controlled by the Federal District government […]
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Brazil lender BRB to seek $637 million loan from credit guarantee fund
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By Luciana Magalhaes
SAO PAULO, March 10 (Reuters) – Brazilian lender BRB plans to request a 3.3 billion reais ($637.37 million) loan from Brazil’s credit guarantee fund, FGC, by the end of the month to support its capitalization efforts, according to a person familiar with the matter.
BRB is controlled by the Federal District government and was involved in the proposed acquisition of Banco Master, which was liquidated in November amid severe liquidity challenges.
The lender is seeking to raise 6.6 billion reais to address losses tied to allegedly fraudulent credit portfolios purchased from Master, whose owner, Daniel Vorcaro, is currently in jail. Through his lawyers, Vorcaro has denied wrongdoing.
The FGC, a private entity that ensures the security of depositor and investor funds in the Brazilian financial system, has already disbursed 38.4 billion reais to Banco Master creditors and is seeking to replenish its reserves by collecting 32.5 billion reais in advance payments from banks.
The BRB loan plan was first reported by newspaper Valor Economico and independently confirmed by Reuters.
The credit request to the FGC must be submitted by the Federal District’s government, the source said. In an email to Reuters, Federal District Governor Ibaneis Rocha declined to comment, saying such matters should be handled by BRB itself.
BRB and FGC did not immediately respond to requests for comment.
Federal police investigators said Master sold BRB 12.2 billion reais in potentially forged credit operations. The former BRB head, who led the negotiations at the time, has denied any wrongdoing.
BRB has already received legislative approval to conduct a series of transactions aimed at stabilizing its finances. The lender is also exploring alternative capitalization strategies, including creating real estate funds and selling a stake in a credit-focused subsidiary, the person familiar with BRB’s plans said.
The loan would serve as a line of credit to be drawn upon if needed, the person added.
($1 = 5.1775 reais)
(Reporting by Luciana Magalhaes in Sao Paulo; Additional reporting by Isabel Teles in Sao Paulo; Editing by Matthew Lewis)