Sete Brasil to file for bankruptcy protection as early as Friday -sources

Banco Bradesco

29/04/2016 21:03

By Guillermo Parra-Bernal and Tatiana Bautzer 
    SAO PAULO, April 29 (Reuters) - Sete Brasil Participações SA 
will file for protection from creditors as early as Friday, two 
sources said on Friday, as months of tussling with the rig 
builder's sole client and looming debt payments weighed on the 
company. 
    Sete Brasil declined to comment.  
    Shareholders in Sete Brasil voted last Wednesday to allow 
the company to seek bankruptcy protection after efforts to 
secure a long-term contract with state-controlled oil producer 
Petróleo Brasileiro SA  PETR4.SA  failed. Petrobras, as Sete 
Brasil's sole client is known, owns 5 percent of the rig leaser. 
 urn:newsml:reuters.com:*:nL2N17N273 
    A source familiar with the decision told Reuters last week 
that partners holding more than 90 percent of Sete Brasil 
approved the plan, without detailing a timetable or a strategy 
to do so.  
    Any petition seeking bankruptcy protection would be filed in 
Rio de Janeiro, where Sete Brasil is based, said the two 
sources, who asked for anonymity to speak freely about the plan. 
    The other shareholders, which have their combined 95 percent 
stake in Sete Brasil in an investment vehicle known as FIP 
Sondas, include pension funds Previ and Petros, investment firm 
EIG Global Partners and banks Grupo BTG Pactual SA  BBTG11.SA  
and Banco Bradesco SA  BBDC4.SA . 
    There has been a fierce battle between Petrobras and Sete 
Brasil's shareholders, creditors and suppliers for a failed 
government-sponsored plan to build the world's biggest 
deep-water drilling fleet order. The $90 billion project began 
to fall apart in 2014 when Petrobras and Sete Brasil became 
engulfed in Brazil's worst corruption scandal.  urn:newsml:reuters.com:*:nL2N17I1MQ 
    Sete Brasil's collapse would be devastating not only for the 
banks, pension funds and investment firms that backed the 
project, but also for dozens of shipbuilders and manufacturers 
supplying the company. More than 800,000 local shipbuilding jobs 
could be destroyed, sparking about $12 billion in losses for the 
economy, one of the sources said on Friday. 
    Both Petrobras and state development bank BNDES abandoned 
the project as the corruption probe swelled, leaving Sete Brasil 
moribund. BNDES reneged on prior commitments to refinance the 
loans. 
    Petrobras Chief Executive Officer Aldemir Bendine and 
officials at the company's exploration and production division 
are at loggerheads over the Sete Brasil contract, sources 
recently told Reuters. The tussle forced BTG Pactual and 
creditors to write off part of the value of their investments 
and loans to Sete Brasil. 
    The standstill period for which 15 billion reais worth of 
loans to Sete Brasil were extended expires next month, the 
sources said on Friday.  
    Lenders Itaú Unibanco Holding SA  ITUB4.SA , Bradesco, Banco 
Santander Brasil SA  SANB11.SA  and state-controlled Caixa 
Econômica Federal  CEF.UL  and Banco do Brasil SA  BBAS3.SA  
renewed the credit lines in February in exchange for access to 
4.3 billion reais in collateral at government-backed naval fund 
CDFMM. 
    ($1 = 3.4471 Brazilian reais) 
 
 (Reporting by Guillermo Parra-Bernal and Tatiana Bautzer; 
Editing by Toni Reinhold) 
 ((guillermo.parra@thomsonreuters.com; +55-11-5644-7714; 
+55-119-8346-7153; Reuters Messaging: 
guillermo.parra.thomsonreuters.com@reuters.net)) 
 
Keywords: BRAZIL CORRUPTION/SETE BRASIL