Odebrecht subsidiary plans to restructure debt
Odebrecht Engenharia e Construção (OEC), a subsidiary of Brazilian conglomerate Odebrecht, is planning to restructure its debt.
The company seeks to reduce the interest rate of its debt and lengthen the maturity, reported Valor Econômico newspaper, which did not unveil the sources of this information. The amount of debt to be restructured totals US$3bn.
Last week, Moody's downgraded OEC's rating, following the decision of the subsidiary to exercise its right to a 30-day grace period on paying interest on outstanding bonds. The US$12mn interest payment subject to the grace period was due October 25 and is linked with an outstanding US$550mn bond.
OEC hired Moelis & Company for the debt restructuring, while Rothschild will advise the company's bondholders, said the report.
Odebrecht is at the epicenter of the Lava Jato graft probe, which uncovered fraudulently obtained construction contracts at oil company Petrobras. This led to a drop in revenue, requiring the company to sell assets to service its debt.
In the first half, OEC posted a net loss of 1.6bn reais (US$426mn), reversing a net profit of 55mn reais in the year-ago period. It's gross revenue dropped 46% to 3.35bn reais.
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