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Peru's Graña y Montero eyes mining projects, to cooperate in Odebrecht probe
November 18, 2017 / 2:44 AM / in a month

Peru's Graña y Montero eyes mining projects, to cooperate in Odebrecht probe

LIMA (Reuters) - Peru’s largest construction company, Graña y Montero, is hoping to win major mine contracts to replace lost business, its chairman said on Friday, as it seeks to minimize the fallout from its links with Brazil’s scandal-plagued builder Odebrecht.

In an interview, Augusto Baertl said opportunities for Graña included plans by Anglo American PLC and Minsur to build new mines in the world’s No. 2 copper producer.

“We have a relationship with Anglo American due to projects we have with them in Chile,” Baertl said. “And in Mina Justa ... we are obviously in permanent contact with the company eager to be invited and participate in its development.”

Anglo American has said it plans to invest $5 billion in its Quellevaco mine, while Minsur expects to invest $1.5 billion in its Mina Justa project.

The builder is also eyeing government contracts for reconstruction efforts in northern Peru, which was hit by devastating floods earlier this year.

Grana’s ability to bid has been called into question due to its ties with Odebrecht, which has admitted to paying millions of dollars of bribes to win government contracts in Peru and across Latin America and Africa.

“We understand that there is no prohibition for that,” said Baertl, who became chairman in March.

Graña’s shares have fallen dramatically on the Lima and New York bourses this year, especially after the cancellation of Odebrecht’s $7.2 billion gas pipeline project, in which the company had a minority stake. The stock closed at 2.01 soles ($0.6209) on Friday, down from 4.70 soles at the start of the year.

Earlier this week, a lead prosecutor said the attorney general’s office was investigating Graña’s involvement in Odebrecht’s bribes. Graña has repeatedly denied any wrongdoing.

“We are willing to cooperate with the investigative process, especially now that they have formally declared that they are moving forward with investigations,” Baertl said.

He called on President Pedro Pablo Kuczynski to veto a law passed by congress that would place financial sanctions on companies that had been partners of firms involved in bribes.

“It violates the presumption of innocence,” he said. “It ties our hands with asset sales, which we are doing to comply with an agreement with banks and repay our debts.”

The company has paid off half of the $330 million in debt it incurred to finance the canceled pipeline, Baertl said. The company has a $3.2 billion backlog of pending projects, mostly with the private sector.

Reporting by Marco Aquino, Writing by Luc Cohen; Editing by Richard Chang and Mary Milliken

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