- Sale of Invepar stake was crucial for OAS restructuring plan
- OAS bondholders said likely to get 15-20 cents on dollar
OAS SA, the Brazilian builder seeking to emerge from bankruptcy protection, agreed to sell its stake in toll-road operator Invepar to Brookfield Asset Management Inc., according to a person with knowledge of the matter.
Brookfield will pay 1.35 billion reais ($356 million) for OAS’s 24 percent stake in Invepar, according to the person, who asked not to be identified discussing private information. Funds from the sale would be used to pay bondholders, and owners of unsecured dollar notes can expect recovery values of around 15 cents to 20 cents on the dollar, depending on the outcome of several other transactions, the person said.
Brookfield had already agreed to provide 800 million reais in debtor-in-possession financing to OAS that used the Invepar stake as collateral. The amount of the loan has been reduced and will take the form of exit financing, according to the person.
OAS and many of its Brazilian construction peers were swept up in Brazil’s largest ever corporate scandal after prosecutors arrested some executives in November, accusing them of paying kickbacks to state-run companies and politicians to win contracts with state-controlled oil producer Petroleo Brasileiro SA. The scandal has crippled an industry that accounts for hundreds of thousands of jobs in Latin America’s biggest economy. OAS became the largest Brazilian builder to seek protection from creditors.
Dollar bonds make up the lion’s share of OAS’s roughly 10 billion reais in total claims, according to a restructuring plan presentation from June. The company’s notes due in 2019 with a face value of $875 million most recently traded at 7.25 cents on the dollar.
Separately from the Invepar deal, OAS is also in talks about the sale of oil-and-gas and water-treatment assets, the person said. A creditors’ generally assembly planned for Tuesday will probably be rescheduled for next week, the person said.
A company reorganization plan from June shows it expects revenue to bottom out in 2017, with sales growth resuming again the following year.
Brookfield spokesman Kristhian Kaminski declined to comment. An OAS press official declined to comment.
Brazilian newspaper Folha de S. Paulo reported the Invepar sale price earlier Tuesday.