Dealflow.la #62 - Hezbollah 🇱🇧 in LatAm 🌎, $1,130 fee for African travelers to visit El Salvador 🇸🇻, & Musk’s Starlink's 🇺🇸 $90 Million contract to offer free internet in Mexico 🇲🇽.

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Nov 17, 2023

Funding

Loads 🇨🇱 raised a $2.1 Million Seed round led by Nazca Ventures 🇨🇱, with funding from Canary 🇧🇷 and Alaya Capital 🇦🇷 to build an online platform intended to connect local producers with the international market. The company's platform helps growers diversify their businesses by providing them the opportunity to take their products to new markets and provide support in the operational, financial, and logistical process, enabling small and medium-sized local producers to scale their businesses and increase revenue.

Creze 🇲🇽 raised $5.8 Million in Debt Financing from BBVA Spark 🇪🇸 to provide simple working capital loans intended to help the Mexican entrepreneurial community get credit. The company's loans have several features including no pre-payment penalty, no requirement of credit history, quick disbursal, and minimum requirements, enabling small and medium businesses to avail of short-term loans for business growth.

Galactic Holdings 🇲🇽 raised a $6.3 Million Series A round led by Galaxy Interactive 🇺🇸 and Dragonfly 🇺🇸 to build a digital finance platform designed to empower people in LATAM with comprehensive crypto services. The company's platform offers an all-in-one ecosystem for cryptocurrency transactions, which includes a crypto wallet, a crypto exchange, and Mexican Pesos pegged stablecoin, enabling investors to access and use cryptocurrencies, whether for trading, remittance, or payment purposes in an easy way.

Able-On 🇧🇷 raised a $7.3 Million Venture round led by ITA Transporte 🇧🇷 to build a mobility platform designed to allow modern companies to use technology in their daily mobility, with complete and intelligent solutions. The company offers IoT equipment with a real-time analytics platform, forming high-performance and incredibly customer-adaptive solutions.

GOPASS 🇨🇴 raised a $15 Million Series A led by Kaszek 🇦🇷 to build a financial software application designed for contactless payments. The company's platform gives security for making transactions without having cash or direct contact with cards, enabling customers to make digital payments for parking and toll services.

Mercado Pago 🇧🇷 raised $466 Million in Debt Financing led by Citibanamex 🇲🇽. Citi's investment is strategically divided between the two countries, with Banco Citibank SA contributing $237 million to Brazil and Citibanamex providing the equivalent of $229 million to Mexico. The two-year agreement will be specifically allocated to boost the lending capabilities of Mercado Pago's financial arm, Mercado Crédito, focusing on consumers, entrepreneurs, and small businesses, and ultimately stimulating economic activity in both the Brazil and Mexico region. (Techloy)

Sociopolitical News

🇦🇷 Argentina

Argentina, grappling with over 140% inflation, sees residents increasingly resort to second-hand clothing markets for affordable options and selling old clothes to supplement income, amidst a deepening economic crisis. (Reuters)
Javier Milei, a far-right libertarian economist and TV personality, is a presidential candidate in Argentina. He has claimed, without evidence, that stolen and damaged ballots cost him votes in the general election's first round. Milei, likened to Trump and Bolsonaro, warns of potential fraud if he loses the upcoming runoff. His campaign filed a legal complaint alleging "colossal fraud" in prior voting, citing anonymous sources. Milei's radical promises, such as replacing Argentina's currency with the U.S. dollar, have stirred public concern. Despite his claims, Argentine election officials have found no evidence of fraud, and Milei has struggled to substantiate his allegations. (New York Times)
Argentina faces a critical presidential election amidst a faltering economy. The contest is between centrist Sérgio Massa and far-right libertarian Javier Milei. With soaring inflation, a debt crisis, and worsening poverty, the winner will confront significant challenges. Four in ten Argentines live in poverty, and the nation is on the brink of its sixth recession in a decade. The election's outcome will significantly influence Argentina's economic direction and response to these crises. (Al Jazeera)
Hotels in Argentina and Uruguay reportedly refused to accommodate Pink Floyd co-founder Roger Waters due to allegations of antisemitism. Waters, known for pro-Palestinian views, was scheduled to stay in Buenos Aires for his “This is Not a Drill” tour concerts on Nov. 21-22, but his reservations were canceled. In Uruguay, hotels also declined to host him without specifying reasons. The rejection follows accusations of antisemitism against Waters, including criticism by the U.S. State Department for using antisemitic tropes. Waters denies these allegations, attributing them to his stance on Palestinian rights. (AP)

🇧🇷 Brazil

Two men suspected of links to Hezbollah were arrested in São Paulo, Brazil, for allegedly planning attacks on Jewish targets. Brazilian police, aided by Israel's Mossad, disrupted the plot. The suspects face charges of involvement in a terrorist organization and preparing terrorist acts, with potential prison sentences of up to 15.5 years. (BBC)
Petrobras, Brazil's state-run oil company, has increased its 2023 oil and gas production forecast to 2.8 million barrels per day, up from 2.6 million, due to new wells and platform ramp-ups. Despite a 41.5% drop in third-quarter profit, the company plans to pay significant dividends to shareholders. Petrobras has also reduced its CAPEX estimate to $13 billion, citing post-pandemic supplier challenges. (Reuters)
Brazil's annual inflation rate dropped to 4.82% in October, nearing the central bank's target range, and backing the case for continued interest rate cuts. This deceleration in inflation allows for two more half-point cuts, aiming to reduce the benchmark Selic rate to 11.25% by January's end. This trend aligns with broader cooling inflation across Latin America following aggressive pandemic-era rate hikes. (Bloomberg)
Abu Dhabi's ADNOC made a new bid to acquire a stake in Brazilian petrochemical producer Braskem, offering 37.29 reais per share, valuing Novonor's 38.3% stake at 10.5 billion reais ($2.14 billion). This bid, more than double Braskem's recent closing price, caused its shares to surge by up to 23% on the São Paulo stock exchange. The proposed payment is split into half cash and half via a seven-year ADNOC senior equity instrument with 7.25% annual interest. Petrobras, co-shareholder in Braskem, is reviewing the offer, which requires a new shareholder agreement. (Reuters)
Brazil is preparing to implement a minimum 15% tax on multinational corporations' profits, aligning with the G20's agenda to combat tax evasion. This move comes as Brazil gears up for its G20 presidency in December. The initiative follows the OECD's guidelines to ensure large multinationals pay at least a 15% tax in all jurisdictions they operate in. Although Brazil's corporate income tax is already at 34%, higher than the global minimum, the implementation details will be crucial. (Reuters)

🇨🇱 Chile

Chile's SQM, the world's second-largest lithium producer, lost over $1 billion in market value due to lower lithium prices impacting its third-quarter profits. Despite this, the company plans to maintain production at maximum capacity. Lithium prices have fallen sharply, driven by reduced global demand for electric vehicles. SQM's strategy includes building warehouse inventories and possibly reducing sales volumes to align with market conditions. This development occurs amid Chile's efforts to increase state control over its lithium industry, focusing on sustainable operations in the Atacama salt flats. (Reuters)
Eramet, a French mining group, is significantly investing in lithium and nickel production despite global economic challenges. They plan to enhance their Argentinian lithium project and have acquired a large lithium concession in Chile. Eramet also aims to double nickel output in Indonesia and increase manganese production in Gabon. The investment is driven by the growing demand for battery minerals, although financial difficulties persist in their New Caledonian nickel subsidiary. (Reuters)

🇨🇴 Colombia

Colombian police arrested four suspects linked to the kidnapping of Luis Manuel Diaz, father of Liverpool footballer Luis Diaz. Diaz was held hostage by the ELN guerrilla group for two weeks. (CBS)
Colombia has begun sterilizing hippos, descendants of those brought by Pablo Escobar, to control their population of over 100 roaming unsupervised in rivers. The government's plan includes sterilizing 40 hippos annually, possible relocation, and euthanasia. These hippos, with no natural predators, are considered invasive and a threat to the ecosystem. (NBC)

🇸🇻 El Salvador

El Salvador has implemented a $1,130 fee for travelers from 57 mostly African countries and India passing through its main airport. This move, amid U.S. pressure to control migration, is seen as an effort to curb the flow of migrants to the U.S. border. (ABC)
Over two years after making Bitcoin legal tender, El Salvador faces narrowing losses on its Bitcoin holdings. President Bukele's dollar cost averaging plan involves buying one Bitcoin daily. Despite initial heavy losses, the country's Bitcoin investment shows a reduced deficit, with El Salvador’s bonds performing well and the country's credit rating improving. However, Bitcoin adoption among the populace remains limited. (Coin Desk)

🇬🇹 Guatemala

Guatemalan prosecutors aim to strip President-elect Bernardo Arévalo and party members of immunity for allegedly encouraging a university takeover via social media in 2022. The legal actions, seen as attempts to prevent Arévalo's January inauguration, are the latest in a series of challenges against the anti-corruption leader and his Seed Movement party. The U.S. and OAS have criticized these moves as politically motivated and undermining democracy. (ABC)
Guatemalan President-elect Bernardo Arévalo faces a 'coup by lawfare,' as authorities attempt to prevent his taking office through legal challenges and raids. Arévalo's victory was unexpected, and his party, comprising young idealists, is under legal scrutiny. Despite these challenges and the attorney general's actions, Arévalo remains confident in assuming power in January, emphasizing the importance of democracy and social justice. (NPR)

🇭🇳 Honduras

Thousands protested in Honduras against President Xiomara Castro, accusing her government of unconstitutional actions and fearing a shift towards dictatorship. The opposition-led demonstration in Tegucigalpa criticized Castro's approach to appointing public officials, likening her leftist administration to regimes in Cuba, Venezuela, and Nicaragua. The protests were sparked by the ruling party's controversial election of an interim chief prosecutor without a full congressional vote. (Reuters)

🇲🇽 Mexico

In Mexico City, protesters demand a thorough investigation into the death of Jesús Ociel Baena, Mexico's first openly nonbinary magistrate and passport holder. Baena was found dead in their apartment, raising concerns among LGBTQ+ advocates and leading to widespread demonstrations. (ABC)
Mexican officials have imposed severe, monthslong water restrictions in Mexico City due to drought diminishing reservoir levels. The Cutzamala system, crucial for the city's water supply, is at historic lows, leading to significant cuts in water flow and affecting millions. This unprecedented situation calls for new water conservation habits among residents. (ABC)
A massive fire in downtown Mexico City, which originated in a warehouse in the Tepito district, was 90% under control by late evening. The blaze sent a large plume of smoke into the sky, but no casualties were reported. Hundreds were evacuated as firefighters worked to extinguish the flames. (Reuters)
Starlink, part of Elon Musk's portfolio, has secured a contract worth 1.56 billion pesos ($89.80 million) to offer free internet in Mexico through 2026. The contract was awarded for offering the best prices in a public tender. Starlink is among nine companies Mexico has contracted for this initiative. Additionally, Starlink will provide infrastructure for Mexico’s state energy firm until December 2026. (NBC)
Mexico's ruling Morena party announced candidates for eight governorships and the Mexico City mayorship. However, unity concerns arise after the exclusion of popular candidate Omar García Harfuch due to gender quota requirements. Harfuch, despite winning polls, was replaced by a female candidate, raising questions about potential party desertions. Morena, a coalition united by President López Obrador's personality, faces challenges in maintaining cohesion as it prepares for the presidential transition. (AP)

🇵🇦 Panama

First Quantum's Cobre Panama mine faces escalating protests and potential closure, highlighting environmental, social, and governance (ESG) issues in the mining sector. The project, significant for both global copper production and Panama's GDP, has sparked widespread opposition over environmental concerns and lack of transparency in government negotiations. The situation underscores the mining industry's challenge in securing social licenses amidst increasing ESG scrutiny. (Reuters)

🇵🇾 Paraguay

Paraguay and Venezuela are reestablishing diplomatic ties, which were severed in 2019 when Paraguay recognized opposition leader Juan Guaido as Venezuela's interim president. This decision follows discussions between Paraguay's President Santiago Pena and Venezuelan President Nicolas Maduro. (US News)
Paraguay's re-entry into the U.S. beef market, though small, has sparked controversy. The USDA decision to import fresh beef from Paraguay, constituting only 0.05% of U.S. imports, is opposed by the National Cattlemen’s Beef Association (NCBA) due to concerns over Paraguay's history of foot-and-mouth disease and the use of outdated data in risk assessments. The NCBA fears this could jeopardize the safety of the U.S. cattle herd. (Food Saftey News)
Hezbollah, a Lebanese militant group, has been under scrutiny for its alleged operations in South America, particularly in the lawless 'Tri-Border Area' of Argentina, Brazil, and Paraguay. This focus includes Ciudad del Este, Paraguay, known for its bustling trade and trafficking activities. The U.S. counterterrorism bureau has identified this area as a fundraising base for Hezbollah financiers, highlighting concerns about the group's involvement in organized crime and money laundering in the region. (France 24)

🇵🇪 Peru

Peru's economy contracted by 1.29% in September, exceeding forecasts and marking a deeper recession than expected. This downturn, the third consecutive quarterly contraction, reflects political instability and diminishing public confidence in President Dina Boluarte's administration. The government's response includes a $2.6 billion loan program to support struggling businesses amidst rising loan delinquency concerns. (Bloomberg)
China's $3.6 billion deep-water port project in Chancay, Peru, has raised concerns about national security implications due to its proximity to the U.S. and potential economic influence in the region. The project, part of China's Belt and Road initiative, is transforming the small fishing town and could significantly reduce shipping times between South America and Asia, bypassing U.S. and Mexican ports. This development signifies China's growing investment and influence in Latin America. (NBC)
Peruvian President Dina Boluarte met Chinese President Xi Jinping, discussing infrastructure projects and investments, including the Chancay megaport, at the Asia-Pacific Economic Cooperation forum. The project is expected to enhance trade and attract new Chinese investments. (US News)

🇵🇷 Puerto Rico

A federal judge has tentatively approved part of a plan to restructure $10 billion debt of Puerto Rico's power company. Amid ongoing negotiations and protests over potential electric bill increases, the latest proposal aims to cut the debt by nearly 80%. The confirmation hearing is set for March 2024. (ABC)
A man with Russian and Moldovan citizenship pleaded guilty to creating and renting out a botnet, IPStorm, which illegally controlled thousands of devices for clients wanting to hide their internet activity. The scheme, investigated by the FBI in Puerto Rico, ran from 2019 to 2022 and generated over half a million dollars. (ABC)

🇻🇪 Venezuela

Venezuela will proceed with a referendum on December 3 over rights to the oil-rich Esequiba territory, despite Guyana's request to the World Court to halt the vote. The referendum, a subject of a long-standing border dispute with Guyana, seeks Venezuelan public support to reject the International Court of Justice's jurisdiction and integrate the region as a new state. The court's final ruling on the main case could take years. (Reuters)
Guyana has urged the UN's highest court to halt a Venezuelan referendum that poses an "existential threat" by potentially annexing a large part of Guyana. The dispute, dating back to 1899, concerns territory rich in natural resources. Guyana seeks the court's intervention against Venezuela's referendum, escalating tensions between the two South American nations. (ABC)
Chevron Corp has started supplying fuel to Venezuela's state-run oil company PDVSA, expanding their existing oil swap agreement following the U.S. easing sanctions on Venezuela's oil sector. This includes delivering heavy naphtha and gasoline blend stock, with the first shipments already arriving in Venezuela. The exact compensation mechanism for these fuel shipments remains unclear. (Reuters)
Venezuela's state-run oil company PDVSA is offering to sell up to 1 million barrels of Corocoro crude through an intermediary, potentially marking its first sale of this grade in two years. This follows the easing of U.S. oil sanctions on Venezuela. (Reuters)

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