CHILEAN BILLIONAIRE’S FINANCIAL COMPANY DECLARES BANKRUPTCY

Chilean-based financial corporation Corp Group Banking SA, controlled by mogul Alvaro Saieh, filed for bankruptcy in the Delaware court of the US. The holding, headquartered in Santiago, did so after the pandemic caused a global economic downturn and worsened the banking sector.

Bloomberg experts call this step expected. Bankruptcy was very likely after the corporation had missed out the interest payments (6.75%) on its $ 0.5 billion bonds that mature in 2023.

On October 15, 2020, even the grace period for payments expired, and the financial problem was not resolved.

One of the problems caused by the pandemic was social unrest in Chile. It affected the activities of the main operating branches of the holding, the Brazilian firm Itaú. The company entered the holding in 2016 by merging with CorpBanca. Itaú owns 26.6% of the shares of the holding, which holds the 8% share in the Chilean market and has a capitalization of about $ 3.4 billion.

We should recall that in 2014, Alvaro Saieh agreed to sell a controlling stake in CorpBanca to the Brazilian company Itau Unibanco Holding SA for $ 1.8 billion. The businessman also has large stakes in retail, real estate, hospitality and media sectors.

Earlier in June 2021, the conglomerate announced a $ 1.15 billion issue and sale of new shares to meet the requirements of Basel III, a global voluntary regulatory framework related to the bank capital adequacy and market liquidity risks.

Alvaro Saieh, who acquired a negative-equity lending institution (Banco Concepción) in 1995 and created Chile's fourth-largest bank in less than 10 years, has focused on organizing social funds in recent years.