Camargo Corrêa offers assets in debt recovery plan

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Tuesday, December 8, 2015

Brazilian construction group Camargo Corrêa is prepared to sell assets to help reduce its 24bn-real (US$6.38bn) debt, according to CEO Vitor Hallack.

"We put up 9bn reais to acquire cement manufacturer Cimpor [Cimentos de Portugal] in 2012, which became InterCement. It was a strategic option to double our size in Brazil and increase our international presence," Hallack was quoted as saying by local paper Folha D. São Paulo.

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Brazil's economy, however, has negatively impacted the company's plans, the executive added.

To resolve matters, Camargo Corrêa has extended 2bn reais of its short-term debt. After negotiating with banks, its obligations have been extended to 66 months from 12 months. Moreover, assets in two companies could be sold off if the price is right and the opportunities arise, Hallack said.

The company could sell off textile group São Paulo Alpargatas and seek partners for InterCement, according to Hallack, who reiterated that the company's energy firm CPFL Energia and transportation infrastructure arm CCR will not be sold.

InterCement factory in Cubatão, São Paulo (CREDIT: InterCement)

With some 27.6bn reais in annual revenues, Camargo Corrêa is one of Brazil's largest construction groups. Among its main competitors are local engineering groups Odebrecht, Andrade Gutierrez and OAS.

LAVA JATO

Camargo Corrêa, as well as many other local engineering companies, is being investigated by federal police under the so-called Lava Jato (Car Wash) corruption scandal.

Although it is being scrutinized, the company has signed a leniency agreement in exchange for cooperation in the investigation. The company has paid 804mn reais in damages.