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Odebrecht's involvement in Petrobras corruption scandal costing the conglomerate dearly

Friday, March 11th 2016 - 20:47 UTC
Full article 10 comments
Creditors are demanding the company's crown jewel as collateral to refinance the group's debt. The company has an annual turnover of US$ 31bn Creditors are demanding the company's crown jewel as collateral to refinance the group's debt. The company has an annual turnover of US$ 31bn
The petrochemical Braskem in association with Petrobras represents half of Odebrecht's annual revenue The petrochemical Braskem in association with Petrobras represents half of Odebrecht's annual revenue
One of Brazil's largest private conglomerates, the group is in the middle of a serious confidence crisis since CEO Marcelo Odebrecht prison sentence of 19 years  One of Brazil's largest private conglomerates, the group is in the middle of a serious confidence crisis since CEO Marcelo Odebrecht prison sentence of 19 years

The Odebrecht group of companies, whose top officials have been sentenced to prison for involvement in the corruption scheme of Brazil's largest company Petrobras, has come under strong pressure from its creditors to use the crown jewel, the petrochemical company Braskem as collateral to avoid filing for bankruptcy.

 The outstanding debt of the group is in the range of nearly R$10 billion (US$2.8bn). Avoiding the fall of the ethanol producer Agroindustrial will also be a decisive step in containing the crisis of confidence that could bring down other companies from the conglomerate, which has an overall debt of more than R$100 billion (US$ 27.2bn) in Brazil and abroad.

Another key decision which is already under discussion will be the appointment of a new head, after Marcelo Odebrecht received a prison sentence of more than 19 years for his participation in the corruption scheme at Petrobras under investigation in Operation Lava Jato.

According to Sao Paulo's reliable main daily, Folha, to restructure the debt of Agroindustrial and extend the payment deadline, creditors want Odebrecht to offer Braskem shares as collateral. The petrochemical company is controlled by Odebrecht and is a partner of Petrobras.

If a new agreement were to be sealed according to these terms, Bradesco, Itaú, Santander and Banco do Brasil would all own part of Braskem were Agroindustrial to renege on its payment plan.

Braskem accounts for more than R$100 billion, half of all Odebrecht revenue.

Odebrecht would prefer not to trade these shares in this manner; however and according to Folha despite denying it, the Odebrecht group is negotiating the sale of its participation in Braskem.

There are “no negotiations for the sale of Braskem participation” the Odebrecht conglomerate said in a statement, but Sao Paulo financial operators insist that talks are taking place.

The conglomerate, one of Brazil's largest private companies is in the middle of a serious confidence crisis because of all the corruption allegations, not only in Brazil but in the rest of Latin America and Africa.

Odebrecht is a global organization, founded in 1944, with presence in 21 countries and diversified business activities in the fields of engineering and construction, industry, and in the development and operation of infrastructure and energy projects. The company last year had a turnover of 31bn dollars and employs worldwide some 165.000 people.

Top Comments

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  • Brasileiro

    The leniency agreement has been signed! While the PT is in government Brazil will not lose any of your jewelry!

    We do not depend on anything of the West!

    Our future is in the East! In the Russia, China, India and Africa. Our efforts are directed towards the East. USA and Europe are the past!

    BRICS omnipresent

    https://www.youtube.com/watch?v=YykjpeuMNEk&index=11&list=FLmXPTu1f8AdGlizWNiASx2A

    Mar 11th, 2016 - 09:20 pm 0
  • Lucifer

    There's so few companies in Brazil that when 1 falls its like a house of card.
    This incestual relationship they had is costing the country dearly

    China is going through something similar but on a much grander scale.

    Love to watch the shake out.

    Mar 11th, 2016 - 09:27 pm 0
  • Brasileiro

    Who are you, Lucifer?

    Mar 11th, 2016 - 10:10 pm 0
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