Scandal-ridden Brazilian construction giant Odebrecht files for bankruptcy

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Scandal-ridden Brazilian construction giant Odebrecht, which has admitted spending nearly $800 million to bribe officials across Latin America to win contracts, filed for bankruptcy protection on Monday , said judicial sources.

Lawyers for the company have filed a petition in the Sao Paulo bankruptcy court to negotiate debts of more than $20 billion, officials quoted by Brazilian media as saying.

The demand makes it the biggest debt protection process in Brazilian history, surpassing that of telecommunications provider Oi in 2016.

The procedure allows Odebrecht to maintain its business activities while giving it six months to settle with its creditors.

Among Odebrecht’s main creditors are state-owned banks Banco Nacional de Desarrollo, Banco de Brasil and Caixa Economica Federal.

What is the Odebrecht corruption scandal?

The filing for bankruptcy protection was precipitated by the suspension of the sale of the group’s stake in Braskem – a joint venture petrochemical company created with Petrobras — to Dutch company LyondellBasell, and the May filing for bankruptcy protection by Odebrecht Atvos, the country’s second-largest ethanol producer.

Odebrecht, which is currently in the process of selling assets to limit its indebtedness, thus finds itself in an even more precarious position vis-à-vis its creditors.

Founded in 1944, Odebrecht SA has long been one of the Brazileconomic giants of Miami, building everything from the Miami Heat basketball arena to a hydroelectric dam in Angola.

Great corruption scandal

Often described as a construction company, Odebrecht was also a major player in engineering, agriculture and petrochemical production.

But now Odebrecht is at the center of Latin America’s biggest corruption scandal that has rocked governments and political parties in Brazil, Peru, Colombia and other countries, sending former presidents and top officials to jail.

Once one of Brazil’s most influential people, business leader Marcelo Odebrecht was sentenced to 19 years in prison for his role in the scandal, although he is currently serving a reduced sentence at his luxurious Sao Paulo mansion .

Dozens of politicians got involved in this affair, including former presidents of Brazil Michel Temer and Luiz Inacio Lula da Silvawho is serving a 12-year prison sentence for accepting bribes from the company.

Peru is the other country hardest hit by the scandal: Odebrecht admitted pay at least $29 million in bribes to Peruvian officials since 2004.

Officials in Ecuador, Venezuela, Panama and the Dominican Republic were also tainted.

According to the US Department of Justice, Odebrecht paid $788 million in bribes across 12 countries, with presidents as well as former heads of state and ministers implicated.

In 2018, the construction giant agreed to pay a $700 million settlement to the Brazilian government as part of a $2.6 billion package it pledged to spend in the United States, in Switzerland and Brazil.

(AFP)

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