Odebrecht Files for Bankruptcy Protection

The group has been facing crises since Lava Jato began five years ago

JULIO WIZIACK RAQUEL LANDIM
São Paulo and Brasília

Odebrecht S.A. filed on Monday (17), in the Court of São Paulo, for bankruptcy protection—the largest in Brazilian history. With debts amounting to R$ 98.5 billion ($25.5 billion), the request surpasses the 2016 filing of Oi, which reached R$ 65 billion ($17 billion) in value at the time.

The package includes R$ 51 billion ($13 billion) in debts directly subject to judicial recovery and R$ 14.5 billion ($3.6 billion) in extra-bankruptcies, which have extra guarantees, such as Braskem's shares, as well as R$ 33 billion ($8.5 billion) in debt with companies within the group.

View of facade to Odebrecht office building in Sao Paulo city. (Foto: Joel Silva/Folhapress) - Folhapress

The recovery involves 21 companies from the group, including the ODB holding company and Kieppe, which brings together the Odebrecht family.

Founded in 1944, the Bahian group - which reached R$ 132 billion ($34 billion) in revenues and employed 193 thousand people - has faced difficulties since Lava Jato started five years ago.

Investigations into the company revealed a corruption scheme in which corporate executives paid bribes to politicians and civil servants. The crisis hit the group in a time of high indebtedness. Between 2008 and 2015, Odebrecht's total corporate debt increased from R$ 18 billion ($4.6 billion) to R$ 110 billion ($28.4 billion).

"With the maturity of several debts, the occurrence of unforeseeable events and recent attacks on business assets, ODB's management, with the authorization of the controlling shareholder, concluded that the filing of the judicial reorganization became the most adequate measure to complete the process of financial restructuring, "Odebrecht said in a statement. 

Translated by Kiratiana Freelon

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