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Brazil's Banco Cruzeiro do Sul to pay up to R$70,000 claims to holders
By Marisa Wong
Madison, Wis., Nov. 19 - As part of Banco Cruzeiro do Sul SA's liquidation process, bondholders will be paid claims of up to R$70,000 by Fundo Garantidor de Creditos (FGC) between Nov. 22 and March 28, according to a release from FGC.
Payments will be made through Banco Bradesco SA branches.
After March 28, remaining creditors are to request payment directly from Cruzeiro do Sul, currently in receivership, the release said.
As previously reported, in June Banco Central do Brasil appointed FGC as its temporary special administrator. The central bank imposed a temporary special management regime on the bank because of a detected inconsistency of about R$1.3 billion in the loan portfolio owned by the bank and a related breach of accounting rules.
The central bank froze the personal assets of the controlling shareholders of Cruzeiro do Sul and replaced the board of directors and the executive board. FGC appointed several external advisers to help perform due diligence on the bank's financial information.
FGC intended to acquire a certain amount of the bank's local debt obligations, convert a portion of the debt obligations into equity by canceling the obligations and sell the bank to a potential acquirer.
However, FGC failed to receive a binding offer from a financial institution to acquire Cruzeiro do Sul, and Banco Central do Brasil ordered the liquidation of Cruzeiro do Sul in September.
As a result of the liquidation, FGC's tender offers to buy back the bank's bonds, which began on Aug. 15 and were scheduled to expire on Sept. 13, were canceled.
Sao Paulo-based Cruzeiro do Sul is a private commercial bank that focuses on the paycheck-deductible loan and credit card loan segments.
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