Odebrecht bondholders ask for collateral, cash infusion to restructure


By Tatiana Bautzer

SAO PAULO, March 4 () - A group of bondholders of construction conglomerate Odebrecht SA proposed on Monday the restructuring of $3 billion in bonds requiring new collateral and a cash infusion to allow a four-year extension on maturities.

In a proposal publicized by the bondholders advisers, Rothschild & Co and law firms Davis Polk and Pinheiro Neto, bondholders require payment with no discount from the bonds' face value.

The proposal is radically different from what Odebrecht had floated to bondholders in recent meetings, a discount of 70 percent over the bonds value, reported.

Odebrecht is the controlling shareholder in the company, and its stake is already pledged as collateral to the conglomerate´s largest banking loans with local creditors such as Banco Bradesco SA.

The conglomerate, implicated in a multinational corruption scandal, has been in negotiations with LyondellBasell Industries NV for a merger between the two companies.

Bondholders also ask to be consulted before asset sales.

In an e-mailed statement, Odebrecht said the publicly released proposal "was not discussed" between the company and its bondholders and is "unfeasible". The conglomerate added its advisers are working on a formal proposal that would be consensual.

Odebrecht has spent the past four years at the center of one of the largest corruption scandals in Latin America, after admitting paying bribes for works contracts from Peru to Panama. It has paid about $3.5 billion in settlements as a result.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More