As a result of the political crisis affecting the country since 2018 together with the pandemic that began in 2020, the chicken producer and operator of the restaurant chain Pollo Estrella, was financially destabilized and was seized by at least four banks.
Following a judicial process being handled in the courts of the municipality of Tipitapa, where the central plant of the Nicaraguan company operates, the authorities decided to intervene Avícola La Estrella.
Arguing that the country's situation is complex and that the need for greater liquidity to meet its immediate responsibilities has had consequences on its funding sources, Factoring S.A. announced its exit from the local stock market.
Managers of the financial institution reported that the company began operations in 1998 and in 2011 was authorized by the Superintendence of Banks and Other Financial Institutions (Siboif), to make issues in the stock market.
Due to the Empresa Nacional de Energía Eléctrica is going through a financial crisis, the Council of Ministers approved the decree authorizing the intervention of the entity.
The guarantee to intervene the company was granted by means of Executive Decree PCM-067-2019, which argues that the intervention will be made for reasons of public interest.
In the midst of Nicaragua's delicate economic situation, the government has announced that the 5.2% increase in the minimum wage agreed in March will come into effect on September 1.
Official media reported that the National Minimum Wage Commission ratified the agreements reached in March 2018, and from September 1 the new salaries will enter into force.
The IMF believes that the financial stability framework is not well prepared to handle a potential systemic financial crisis without seriously compromising fiscal resources.
In a review carried out late last year, the International Monetary Fund identified serious vulnerabilities in the pension sector, secondary markets and crisis management mechanisms and stated that they need to be taken care of immediately.
In addition to the judicial process which was initiated to achieve a settlement of a $61 million debt, the chain store in Costa Rica Casa Blanca expects to close 4 of its 59 outlets this year.
The company explained that the decision to close four of the 59 stores operating in the country is due to a need to achieve higher levels of efficiency and profitability, while it renegotiates the terms of its debtwith banks and suppliers.
A comparison between the crisis in the United States in 1929 and the one occurring now in Greece clearly shows that the sooner the costs of an exit from the crisis are assumed, the less time will be spent suffering from the measures taken to overcome it.
EDITORIAL
Obviously some aspects of the current economic tragedy of Greece are different from those suffered by the United States during Twenties of the last century.
The National Power and Light company is preparing for midyear to issue preference shares for an amount estimated at between $50 and $100 million.
In order to address the financial crisis, improve the equity structure and pay in 2017 $28 million in bond debts, the Compañía Nacional de Fuerza y Luz (CNFL) will be issuing preferred shares for an estimated $50 to $100 million.
Newland International Properties has asked the holders of its bonds to authorize the filing of Chapter 11 of the U.S. Bankruptcy Code
The company has initiated an application for votes so that it can submit a restructuring plan for the company's Senior Secured Notes for $220 million, with the Bankruptcy Court of the United States.
Carlos A. Saravia, the developer's CEO, said that the sale of units in the project was affected by the impact of the financial crisis on potential customers and in the second homes market.
Just as several European countries have done, Honduras must prepare itself to ask for a bailout.
This was the suggestion made by the Social Forum of Honduran External Debt (Fosdeh) during the spring meetings of the International Monetary Fund (IMF) and World Bank (WB). According to Mauricio Diaz, Fosdeh coordinator, "we are still making recommendations, and we have just done so to the IMF and the WB, the general idea is that we have to prepare a rescue plan."
If Congress does not approve loans which enable funding of the state budget, the crisis could be severe.
Roberto Villate, head of the Lider back bench group, said that as a block, they do not support the loan approval because from the beginning they did not agree to an underfunded budget and one without any programatic basis. The official said that with each loan "the country takes one more step in the direction of Greece or Cyprus".
The recent financial crisis demonstrates the importance of systems that provide guarantees on bank savings deposits, giving strength and security to the financial system.
An analysis of the topic by economist Roland J. Sevilla Boza, Chairman of the Deposit Guarantee Fund of Financial Institutions (FOGADE), focuses on news about Nicaragua, but the concepts generally can be extrapolated to the whole region.
Central America and the Dominican Republic have agreed together to ensure financial liquidity, create mechanisms for monitoring risk management and financial systems, as well as taking measures against the effects of the euro zone crisis and the weakness of U.S.
Carlos Acevedo, president of the Central Reserve Bank of El Salvador, told Prensalibre.com that "we are preparing a regional financial system and shielding mechanisms."
A report by Aldesa analyzes the effects for Costa Rica of a potential international crisis.
According to Aldesa:
During this week the market has been permeated by an air of positivity due to expectations that European authorities will solve the problem of the debt crisis. However, if more events occur, there would still be risks for the global economy that could trigger a slowdown in the U.S. and Europe.
Fitch Ratings has issued a special report entitled, "Central American Banking: After the Crisis, a Disparate Evolution"
In Fitch's opinion the banks have shown a mixed performance in Central America during the period of the global financial crisis. At the same time, banking systems have dissimilar perspectives on future performance, reflecting different economic growth prospects in the region.