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UPDATE 1-Brookfield withdraws bid for Brazil's Invepar stake, sources say

Published 2016-02-01, 05:50 p/m
© Reuters.  UPDATE 1-Brookfield withdraws bid for Brazil's Invepar stake, sources say
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By Guillermo Parra-Bernal and Tatiana Bautzer
SAO PAULO, Feb 1 (Reuters) - Brookfield Asset Management Inc
BAMa.TO has withdrawn an offer to buy the 24.4 percent stake
in infrastructure company Invepar held by Brazil's Grupo OAS SA
because the Canadian firm was not given full management control
of the company, two sources with direct knowledge of the
situation said on Monday.
Brookfield failed to reach an agreement with OAS's partners
in Invepar, pension funds Previ, Petros and Funcef, over control
of the firm's main operational and financial areas, said the
sources, who requested anonymity because of the sensitivity of
the issue. Brookfield decided to step away from the deal last
week, one of the sources added.
The sale of the Invepar stake was key to helping OAS emerge
from bankruptcy protection proceedings, and came days after a
Brazilian bankruptcy judge approved a recovery plan. Brookfield
had offered to pay 1.35 billion reais ($341 million) for the
stake and secured the right to outdo bids from any other
interested party.
The decision means that OAS OAEP.UL will have to publish
new terms for the sale of the stake within the next five days
and hold a auction within a month, one of the sources said. The
engineering company, which was founded in the mid-1970s, relies
on a successful recovery plan to remain operational, keep as
many as 100,000 jobs and stay current with suppliers.
None of the sources said whether there other potential
bidders for the Invepar stake.
Grupo OAS filed for bankruptcy protection in March,
struggling with the impact of a corruption probe at
state-controlled oil producer Petróleo Brasileiro SA PETR4.SA
and other state firms; the scandal undercut access to financing
and halted potential government contracts.
Creditors in December had approved OAS's recovery plan,
consisting of a series of asset sales, including a waste
management firm and a rig building unit. Under the plan,
creditors will take an 80 percent loss on their debt and accept
repayment for up to 25 years.
Brookfield's withdrawal from the process was first reported
by Veja magazine's Radar column late on Monday.
($1 = 3.9609 Brazilian reais)

(Editing by Leslie Adler and Jonathan Oatis)

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