The arrest of Brazilian billionaire Andre Esteves tossed his investment bank, Grupo BTG Pactual SA, into a life-or-death struggle to sell assets and raise cash. A fire sale it’s not.
While there’s still no shortage of concern about the bank’s viability, speculation that its demise is imminent has largely faded, and its shares rallied a record 14 percent on Friday. Key to that success was a 6 billion-real ($1.5 billion) line of credit from the nation’s privately backed deposit-guarantee fund. The loan gave BTG enough confidence about liquidity that it passed up a chance to sell a 40 percent stake in Banco Pan SA at its market value to Banco BMG SA, a person with direct knowledge of the matter said. The offer, which was 580 million reais based on Friday’s share price, is now off the table.