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Odebrecht Closes Agreement with Banks to Prevent Judicial Recovery

05/25/2018 - 11h58

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RAQUEL LANDIM
FROM SÃO PAULO

After lengthy discussions, Odebrecht group has closed an agreement with creditors for a new capital injection of R$ 2.6 billion (US$ 0.71 billion) which will prevent its judicial recovery. Only banks Bradesco and Itaú agreed to release more money. Final documents were signed on Thursday (24).

Negotiations dragged on for so long that the company had to rush matters not to be in default on Friday (25), maturity date of a R$ 500 million (US$ 137.17 million) debt with bonus holders abroad. To prevent this from happening, banks should release amounts more quickly.

The loan totals R$ 2.6 billion (US$ 0.71 billion), but it is still not clear if the company will actually have access to its full amount. The agreement closed on Thursday ensures the release of the first tranche of R$ 1.7 billion (US$ 0.47 billion) in the coming days.

To access the additional R$ 900 million (US$ 246.91 million), Odebrecht still needs to reach an agreement with Petrobras. The first tranche of the loan is backed by preferred shares of the petrochemical company Braskem. The second tranche depends on the release of common shares - with voting rights.

According to the model proposed, shares will be delivered to banks under a "fiduciary transfer" - that is, financial institutions become their holders until the loan is fully paid - and this is not allowed by the shareholders' agreement between Odebrecht and Petrobras.

Translated by ANA BEATRIZ DEMARIA

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