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Odebrecht Peru deal hits snag as banks fret over $4.1 bln loan -sources

Published 2016-07-21, 03:39 p/m
© Reuters.  Odebrecht Peru deal hits snag as banks fret over $4.1 bln loan -sources
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By Guillermo Parra-Bernal, Marco Aquino and Mitra Taj

SAO PAULO/LIMA, July 21 (Reuters) - Lenders could accelerate the disbursement of a $4.125 billion loan to Peruvian gas pipeline operator Gasoducto Sur Peruano GSP SA if Brazilian engineering group Odebrecht SA fully exits the project overseeing the construction of the pipelines, three people familiar with the matter said on Thursday.

Odebrecht ODBES.UL , which is ensnared in a corruption scandal in Brazil, is pulling out of Peru to raise cash and repay debts. For the banks, Odebrecht's exit from the construction portion of the project would make financing less risky, one of the people said.

The group of about 20 banks working on a syndicated loan to GSP this week rejected three bids for Odebrecht's 55 percent stake in the pipeline operator, as bidders refused to buy the Brazilian firm's 71 percent interest in the project overseeing the construction of GSP's pipelines, the people said.

The sources declined to be identified because the deal has not been finalized.

Potential buyers, which include Canada's Brookfield Asset Management Inc BAMa.TO , Spain's Ferrovial SA FER.MC , and a Sempra Energy-led consortium, have until Aug. 25 to submit fresh bids, the people said. GSP needs $600 million to repay a bridge loan used for building the pipeline, one of the people added.

The situation underscores the challenges facing Odebrecht, Latin America's largest engineering conglomerate, as its involvement in Brazil's worst-ever corruption scandal undercut access to financing. The "Operation Car Wash" investigation has found a ring of graft and bribery between state companies and contractors, including Odebrecht and other builders.

Several of Odebrecht's 15 subsidiaries are refinancing up to 35 billion reais ($11 billion) in loans and selling assets, Reuters has reported. Ferrovial, Brookfield and Sempra SRE.N all declined to comment. Techint Group, an Italian steelmaking group that the sources said have teamed up with Sempra on the bid, declined to comment.

Macquarie Infrastructure Corp MIC.N , which the sources named as another member of the Sempra consortium, denied being part of it in an email sent to Reuters.

Gasoducto Sur Peruano, a 34-year concession to build and operate more than 1,134 kilometers (700 miles) of natural gas pipelines across Peru's southern region, needs $5 billion in investments in coming years.

If the banks approve a winning bid for the partial or full sale of Odebrecht's stakes, the loan could be approved and disbursed by mid-September, or about 60 days later than previously expected, the people said.

Reuters reported last month that Odebrecht hoped to raise about $2 billion from the sale. SA ENAG.MC and Graña y Montero SA GRA.LM are Odebrecht's partners in GSP, with a 25 percent and 20 percent stakes in the company, respectively. Graña y Montero has 29 percent of the pipeline construction project.

Lima-based magazine Semana Económica had reported the rejection of the bids earlier this week.

($1 = 3.2621 Brazilian reais)

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