In February, BTG Pactual, the Brazilian independent investment bank, acquired a controlling stake in Banco PanAmericano, the country’s largest provider of used-car loans, which is at the centre of one of the biggest scandals to hit Brazil’s asset management industry.
BTG, which is controlled by Andre Esteves, Brazil’s youngest self-made billionaire, is not paying any cash for the 38% stake – which includes 51% of voting rights – but will assume R$3.8 billion ($2.3 billion) of debt to cover the bank’s losses, according to the federal deposit insurance fund.
By taking over the 17.5-year debt with the deposit fund, BTG is paying the equivalent of R$450 million as measured...
