Caixa Bank Threatens to Enforce Odebrecht's Debt

Odebrecht's public bank debt amounts to $R20 billion ($5.2 billion) of which $7 billion ($1.82 billion) belongs to Caixa

Brazil’s Caixa Economic Federal bank is threatening to enforce Odebrecht’s debt, which could spark a cascade effect and force the holding group to file bankruptcy. The next few days will be crucial.

According to people close to the company, between direct and official operations given to the subsidiaries, Odebrecht S.A. holds debts amounting to more than R $ 20 billion ($5.2 billion): R $ 7 billion ($1.82 billion) with Caixa; R $ 7 billion ($1.82 billion) with Banco do Brasil; and R $ 6 billion ($1.56 billion) with BNDES.

Facade of Odebrecht headquarters in São Paulo. (Foto: Joel Silva/Folhapress) - Folhapress

Information from the banks show smaller numbers: R $ 2.2 billion ($570 million) in the Caixa; R $ 2 billion ($520 million) in the FI-FGTS (which is managed by Caixa); and R $ 4 billion ($1 billion) in BB.

These financial institutions would have paid off about 30% of the debt, which is the legal requirement.

Pushed into a delicate financial situation since the Lava Jato operation exploded, Odebrecht has faced considerable difficulty in selling assets and in paying off its debts.

President Jair Bolsonaro (PSL) public bank commanders also have much fear. They do not want any association with the mistakes made in the PT governments in the loans granted to Odebrecht.

Translated by Kiratiana Freelon

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