Mexico Prosecutors Seek Bankruptcy Protection for Oceanografia

Mexican prosecutors filed a request for bankruptcy protection for Oceanografia SA, the oil-services company seized by the government amid fraud allegations.

Prosecutors are seeking to save 11,000 jobs at Oceanografia, ensure Petroleos Mexicanos’s operations and recover banking losses, Mexican Attorney General Jesus Murillo Karam told reporters yesterday.

The government’s petition now goes to a judge in Mexico’s Third District Court in Civil Matters in Mexico City. If accepted, the company would go through a stage of mediation with its creditors in order to explore a reorganization plan. Should that prove unsuccessful, Oceanografia would be liquidated, said Thomas Heather, a partner at law firm Ritch, Mueller, Heather y Nicolau, SC who’s serving as a special adviser to the Finance Ministry on the Oceanografia case.

“It’s one insolvency procedure that has two stages,” Heather said in a phone interview. “Some people have compared it to Chapter 11” in the U.S.

Mexico took control of Oceanografia on Feb. 28, placing it under the Finance Ministry’s Asset Transfer and Administration Service, after Citigroup alleged a $400 million loan fraud. The Ciudad del Carmen, Mexico-based company, which provides maintenance and support services for offshore oil projects, had 69 ships -- including drilling ships and tugboats -- and 11,459 employees, according to its website.

Alleged Fraud

The Attorney General’s investigation is focused on the alleged fraud that Oceanografia carried out against Citigroup’s Banamex unit, Murillo told reporters, according to a transcript e-mailed by his office.

Oceanografia’s unaudited financial statements show it was on pace to achieve annual revenue last year of about $1 billion. The company gets most of its sales from Pemex, the state-owned oil company.

Oceanografia’s creditors have already seized control of the OSA Goliath, the company’s 180-meter construction ship, claiming it as collateral after missed payments. Bond trustee Norsk Tillitsmann ASA said it hired Pareto Securities AS and Pareto JGO Shipbrokers AS to sell the vessel.

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