Odebrecht holding company may request bankruptcy protection

The holding company of troubled construction conglomerate Odebrecht is reportedly assessing making a request for bankruptcy protection.

The board of the company, called ODB, is expected ¡to make a final decision in the next week, according to daily Valor Econômico, which did not reveal the source of the information.

ODB has a debt of 50bn reais (US$13bn), more than the half the debt of the entire Odebrecht conglomerate, including various subsidiaries, which totals 80bn reais.

The specialized local debt restructuring firm RK Partners and law firm E. Munhoz Advogados are working as advisers of Odebrecht on the plan.

In recent weeks, Odebrecht's financial situation has deteriorated rapidly and the chances of a request for bankruptcy protection from the holding company have increased rapidly.

Earlier this month, Odebrecht failed in an attempt to sell its stake in Brazilian petrochemical firm Braskem after having held talks with Dutch company LyondellBasell over its 38.3% stake.

Last month, Odebrecht’s bioenergy company Atvos filed for bankruptcy protection as it seeks to restructure nearly 12bn reais in debt.

In addition, the group’s engineering arm, Odebrecht Engenharia e Construção (OEC), is in negotiations with holders of around US$3bn in international bonds and plans to propose a haircut of up to 70%.

Odebrecht is at the epicenter of the sprawling Lava Jato corruption probe, which saw the disgraced company admit to having paid hundreds of millions of dollars in bribes in various Latin American countries. The fallout from the scandal prompted a major drop in revenues and forced Odebrecht to begin selling assets to service its debt.