November 13, 2018 / 12:27 PM / 7 months ago

Odebrecht construction unit readies $3 billion restructuring -paper

RIO DE JANEIRO, Nov 13 (Reuters) - Odebrecht Engenharia e Construcao (OEC), the construction unit of Brazilian conglomerate Odebrecht SA, is preparing to restructure $3 billion of bond debt, newspaper Valor Economico reported on Tuesday.

A formal announcement is being planned for the end of November when $11.4 million of interest payments come due, the paper said, without saying how it obtained the information.

OEC is being advised by Moelis & Co, while bondholders, who have started to form a centralized negotiating bloc, are being advised by Rothschild & Co SCA, the paper reported.

Representatives for OEC, Moelis and Rothschild did not immediately respond to a request for comment.

According to the paper, the most likely outcome will be a restricted restructuring, in which OEC suppliers and commercial counterparties will not be directly affected.

Parent company Odebrecht has been battered by revelations of a colossal graft scheme it orchestrated that stretched across Latin America. The OEC unit has been hit particularly hard by a downturn in government infrastructure spending.

OEC’s construction backlog has shrunk some 50 percent since the end of 2014. In August, Odebrecht’s CEO said the company was open to bringing in a foreign partner for its construction unit. (Reporting by Gram Slattery Editing by Chizu Nomiyama)

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