Brazilian conglomerate Odebrecht SA has filed for bankruptcy protection in Sao Paulo court to restructure is BRL51 billion (US$13 billion) corporate debt.
The bankruptcy protection would allow the company to maintain its business activities while giving it six months to settle with its creditors. Odebrecht has also asked the court to bar the company's seven largest creditors - six banks and an investment fund - from taking possession or selling shares in the group’s petrochemical company Braskem SA. Interests in Brasken are pledged as collateral to the creditors. The petrochemical company represents about 80% of the Odebrecht's revenue in 2018.
The company's major creditors are Brazilian state-owned lenders Banco do Brasil SA, Caixa Economica Federal and BNDES, as well as private-sector lenders Banco Bradesco SA, Itaú Unibanco Holding SA, Banco Santander Brasil SA, and an investment fund.
Odebrecht has been in the struggle for years after being caught in a large political corruption scandal and bribery that involves governments and political parties in Brazil, Peru, Colombia, and other countries. In 2016, the company has settled BRL3.5 billion (US$915 million) leniency fine with prosecutors in Brazil, the United States, and Switzerland.
Odebrecht operates in the areas of petrochemical, engineering and construction, agroindustry, oil and gas, irrigation and transportation, real estate development, and naval sector in Brazil and internationally. The company produces and trades in hydrous and anhydrous ethanol, and VHP sugar; thermoplastic resins, basic petrochemicals, and other chemical products; and solutions for the upstream oil and gas industry. It also generates electricity using biomass; develops, implements, operates and holds interest in projects in the areas of urban mobility, toll roads, ports, and integrated logistics systems; manages and invests in infrastructure concessions; and develops residential, commercial, corporate, hotel, and mixed-use projects.
In addition, the company offers infrastructure engineering and construction services to the public and private clients in the areas of ports and airports, urban transportation, sanitation, maritime equipment, irrigation, hydroelectric plants, urban requalification, housing, energy, agroindustry, sports arenas, and mining.
The Brazilian group is being advised by financial restructuring firm RK Partners and law firm E. Munhoz Advogados.
