By Contributing Reporter

SÃO PAULO, BRAZIL –  Odebrecht SA, one of the companies at the heart of Brazil’s massive Car Wash (Lava Jato) corruption scandal, took the step on Monday, June 17th, of filing a petition for judicial recovery at the 1st Bankruptcy Court of São Paulo, protecting it from creditors to get back on its feet.

Odebrecht's headquarters in a good neighborhood of São Paulo. (Photo internet reproduction)
Odebrecht’s headquarters in a good neighborhood of São Paulo. (Photo internet reproduction)

Once one of the world’s biggest engineering and construction groups, the conglomerate’s view is that it has not yet gotten acknowledgment that it deserves a second chance.

The conglomerate has been battered by the long-running Car Wash corruption probe, which implicated scores of Brazilian politicians and businesspeople in a massive contracts-for-kickbacks scheme.

The total value of debts listed in its filing for protection against creditors is R$98.5 (US$25) billion, owed by holding company ODB and 21 business units. It is by far the largest bankruptcy filing in Brazil’s history.

Of that total, R$65.5 billion are owed to third parties. Another R$33 billion are intercompany debts among the group, but that must be listed in the court petition.

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

In a statement, Odebrecht said that 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 Participações SA, construction unit Odebrecht Engenharia e Construção (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 large private banks Banco Bradesco SA, Itaú Unibanco Holding SA, and Banco Santander Brasil SA.





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