Why Q4 could be disappointing for Brazil's Invepar
Brazilian infrastructure company Invepar has been hit by two events recently that could have a negative impact on revenues from its highway business in the coming months.
Last week, the city council of Rio de Janeiro approved a bill to suspend the tolls on a section of the 17.4km expressway that crosses important parts of Rio.
The section is operated by concessionaire Linha Amarela, or Lamsa, which is controlled by Invepar. City lawmakers say an audit found Lamsa collected higher tolls than it was allowed to and this generated losses of over 1.6bn reais (US$385mn) for the city.
Following the decision, rating agency Moody’s downgraded Linha Amarela's national rating to 'Ba3.br' from 'Baa1.br', and it remains under review for further downgrade.
“Throughout the disputes with the municipality, Linha Amarela has been able to suspend or revert in court the adverse actions on the concession. We note that the contractual provisions and its numerous amendments comprise robust legal provisions in favor of the concessionaire,” said the agency.
“However, Moody's considers that the risk of further interventions remains elevated, which leaves the company greatly exposed to a material deterioration of its financial metrics and its ability to continue servicing its obligations on time,” it added.
The problem with Linha Amarela is not the only one faced by Invepar.
Last week also saw the country’s transportation watchdog (ANTT) order toll reductions for 11 tolls plazas operated by Invepar’s Via 040 concessionaire, from 5.30 reais to 2.90 reais as of November 19.
Via 040 said it will appeal the decision.
Invepar operates nine highway concessions comprising a total of 1,975km of toll roads, along with the Guarulhos airport concession in São Paulo, and the concession for the Rio de Janeiro metro system.
Invepar’s revenues were 1.98bn reais in the first half of this year, with close to 1bn coming from the airport business, 509mn from the highway area, and 470mn reais from the urban mobility segment.
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