Odebrecht Hires Top Brazil Lawyer Munhoz for Restructuringby
Company insists that bankruptcy ‘isn’t an alternative’
Banks and Odebrecht continue debt talks ‘in a positive way’
Odebrecht SA, the once-powerful Brazilian construction firm with 110 billion reais ($35.2 billion) in debt, hired Eduardo Munhoz, founding partner at E.Munhoz Advogados, to help with the “company restructuring process.”
Munhoz was hired by the holding company about six months ago and has been working with Odebrecht Agroindustrial on its successful 13 billion-real debt restructuring for more than a year, Odebrecht said in an e-mailed statement answering questions from Bloomberg News.
The company, which is struggling to find the cash to pay for projects already in its pipeline, is selling assets and “the dialogue with banks continues in a positive way,” Odebrecht said. It added that “a bankruptcy filing isn’t an alternative.”
Odebrecht is aiming to raise as much as 12 billion reais through divestments to pay down its debt. In June, the company said it hired Lazard Ltd. to “review its financial strategy and improve the management of its investments.” The business generated earnings before interest, taxes, depreciation and amortization of 20.8 billion reais in 2015 and had 25.7 billion reais in cash at the end of last year, it said.
The firm’s difficulties started in June 2015, when Marcelo Odebrecht, the conglomerate’s former chief executive officer and a controlling shareholder, began serving a 19-year prison sentence on charges of colluding with other builders to pay kickbacks in exchange for lucrative public works contracts in the so-called Carwash Probe. The company declined to comment on its shareholder plea bargain agreement.
Munhoz represented OGX Petroleo & Gas Participacoes SA in the restructuring of $3.6 billion in dollar bonds, the largest corporate debt failure in Latin America until then. Munhoz also advised on the bankruptcy filing process of the construction company OAS SA. He worked also on the successful restructuring process of building company PDG Realty SA Empreendimentos e Participacoes, which renegotiate 3.7 billion reais, or 60 percent of its gross debt with the banks.