Brazilian conglomerate Odebrecht SA filed for bankruptcy protection yesterday in a bid to survive liabilities and legal claims amounting to $13bn (51 billion reais).
It comes after years of trying to ride out what has been called the biggest bribery scandal in the history of construction.
Odebrecht was at the centre of Brazil’s sprawling Lava Jato corruption probe, in the course of which prosecutors charged the company with paying about $788m in bribes to officials in 12 countries, mostly in Latin America, to secure contracts.
Its one-time chief executive Marcelo Odebrecht was jailed for 19 years in 2016.
Only last month it rebranded in a bid to distance itself from the scandal, saying it had embarked on a "transformational journey" by replacing its board of directors and adopting a new code of conduct (see Further reading).
But scandal kept haunting the company.
In April, Mexico banned it for three years from federal contracts for corrupt practices.
Also in April, the two-time former president of Peru, Alan GarcÃa, shot himself dead as police arrived at his home as part of a probe into Odebrecht bribes.Â
"Our goal remains the same: to reach a definitive and sustainable solution to our financial equilibrium, which is an indispensable step so that soon we can once again focus on our growth plans," said Odebrecht SA chief executive Luciano Guidolin in a statement yesterday.Â
He added: "The rationale of the institution of court-supervised reorganisation is to preserve the company so that, by maintaining its normal business activities, it can, through its own efforts, surmount its financial crisis. I am confident that we will successfully get through this phase."
The restructuring does not include petrochemical producer Braskem SA, sugar and ethanol subsidiary Atvos Agroindustrial Participacoes SA, construction unit Odebrecht Engenharia e Construcao (OEC), oil company Ocyan, shipmaker Enseada, Odebrecht Transport or homebuilder Incorporadora OR.
Reuters said it would be "one of Latin America’s largest-ever in-court debt restructurings".
Image: Odebrecht has been at the heart of the biggest corruption scandal in the history of construction (Odebrecht)