Brazil’s Odebrecht files for bankruptcy after years of corruption probes

Brazilian conglomerate Odebrecht SA said it was filing for bankruptcy protection on Monday, aiming to restructure 51 billion reais ($13 billion) in debt in what would be one of Latin America’s largest-ever in-court debt restructurings.

The bankruptcy filing comes after years of struggles for Odebrecht, the biggest of the Brazilian engineering groups caught in a sweeping political corruption investigation that rippled across Latin America.

In a statement, Odebrecht said the bankruptcy protection was the best way to conclude its debt restructuring as creditors sought to seize assets pledged as collateral to unpaid loans.

The debt restructuring does not include petrochemical producer Braskem SA, sugar and ethanol subsidiary Atvos Agroindustrial Participacoes SA, construction unit Odebrecht Engenharia e Construcao (OEC), oil company Ocyan, shipmaker Enseada, Odebrecht Transport or homebuilder Incorporadora OR.

The conglomerate’s largest creditors are Brazilian state-owned lenders Banco do Brasil SA, Caixa Economica Federal and BNDES, as well as private banks Banco Bradesco SA, Itaú Unibanco Holding SA and Banco Santander Brasil SA.

The group was advised by financial restructuring firm RK Partners and law firm E. Munhoz Advogados.

Reuters | June 17, 2019

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