SAO PAULO (Reuters) – Corruption-ensnared Odebrecht SA has proposed that creditors take over its sugar and ethanol unit, Atvos Agroindustrial Participacoes SA, in exchange for reducing Odebrecht’s huge debt load, according to two sources with knowledge of the matter.
The move is the latest sign of the radical way in which Brazilian conglomerate Odebrecht, best known for its engineering and construction operations, is remaking itself to renegotiate 70 billion reais in consolidated debt.
Politicians - Executives - Contracts - Latin - America
Accused of bribing politicians and executives to get contracts throughout Latin America, Odebrecht made a deal two years ago with U.S, Brazilian and Swiss authorities, paying a record $3.5 billion in fines to settle charges.
Atvos has about 12 billion reais ($3.25 billion) in debt with various lenders, including state-controlled Banco do Brasil SA , Caixa Economica Federal and development bank BNDES, as well as private Banco Bradesco SA , Itau Unibanco Holding SA and Banco Santander Brasil SA .
Debt-for-equity - Swap - Atvos - Time - Plants
A debt-for-equity swap would give Atvos more time to recover without selling plants, a potential alternative to paying off debt. Both sources, who requested anonymity because the talks are private, said this week that a sale of Atvos’ assets would not be enough to pay off all outstanding debt.
The sources added that a final decision has not yet been made regarding a swap and that an agreement to transfer Atvos ownership may not be reached.
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