Creditors challenge Mendes Junior over debt restructuring

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Friday, November 10, 2017

Brazilian construction group Mendes Junior is facing a dispute with certain creditors over the restructuring of its debts.

In a general assembly with creditors on November 22, the company is planning to approve a restructuring plan regarding existing debt worth 302mn reais (US$92.7mn) in face value.

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Mendes Junior is proposing a debt reduction of 50%, starting payments in 15 years, according to Valor Econômico newspaper.

Two main creditors, which supplied machinery for the company, said they will reject this proposal.

"It is totally impracticable and we will not accept it," said Paulo César Alencar, the lawyer of investor Lauro Carvalho Júnior, who provided trucks and machinery for Mendes Junior for Transnordestina railroad works and is owed 6.2mn reais by the company.

Mendes Junior is one of many construction companies involved in the Lava Jato corruption scandal and is facing difficulties to obtain new projects.