Banks throw Odebrecht a lifeline
Brazilian banks Itaú Unibanco and Bradesco reportedly agreed to provide a loan worth 2.6bn reais (US$704mn) for embattled conglomerate Odebrecht.
The banks, which are already creditors of the company, will provide a loan in two tranches, with the first, worth 1.7bn reais, reported O Estado de S. Paulo, which did not unveil the sources of this information.
Part of the loan will be used to pay overdue overseas bonds. Odebrecht subsidiary Odebrecht Engenharia e Construção failed to pay a 500mn-reais overseas bond, due on April 25. But technically, the company is not in default yet, due to a 30-day grace period to comply with debt obligations.
Odebrecht, along with banks press representatives, declined to comment, when contacted by BNamericas.
Odebrecht will use its shares in petrochemical company Braskem as guarantee for the loan, added the report. The company holds a 38.3% stake in Braskem.
In addition, banks agreed to lengthen an existing loan of Odebrecht worth 7bn reais, which was due later this year, according to the report.
The construction company is mired in the Lava Jato graft probe, which uncovered fraudulently obtained construction contracts and corruption at state-owned oil company Petrobras. This caused Odebrecht revenues to fall, which is why the company is selling assets to service its debts.
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