October 14, 2019 / 7:13 PM / a month ago

Brazil's Odebrecht to propose delay in bankruptcy plan vote: sources

The corporate logo of the Odebrecht SA construction conglomerate is pictured at its headquarters in Sao Paulo, Brazil, July 29, 2019. REUTERS/Amanda Perobelli

SAO PAULO (Reuters) - Brazilian conglomerate Odebrecht SA’s advisors plan to propose a delay in the bankruptcy plan vote by creditors, two people with knowledge of the matter said.

Odebrecht is likely to schedule a creditors assembly on Nov. 18 to comply with Brazilian bankruptcy protection rules, but so far there is not a concrete proposal to vote on, the sources added, asking for anonymity to disclose private discussions.

Creditors presented objections to Odebrecht’s plan this month. Most of the banks said the plan was too vague, with no explicit discount or time frame for recovery of the amount owed by the conglomerate. One creditor, state lender Caixa Economica Federal, requested liquidation.

Advisors plan to install the assembly next month and request creditors to vote for its postponement. Odebrecht advisors expect to let creditors know of the delay request in the coming days.

Odebrecht did not immediately reply to a request for comment.

The conglomerate’s advisors plan to present a more detailed restructuring proposal to be voted by creditors by December, one of the sources said.

Discussions are focused on the timing and strategy to sell petrochemical company Braskem SA (BRKM5.SA), which is the group’s most valuable asset, one of the sources added.

Creditors so far agree that selling the company now would be tough, the sources added, since Braskem is in talks with prosecutors of northeastern state of Alagoas on environmental damage linked to its mining activity in the region.

A similar strategy is being devised for ethanol producer Atvos, which will install a creditors assembly on October 24 and also plans to request a delay in the bankruptcy plan vote.

Reporting by Tatiana Bautzer and Carolina Mandl; Editing by David Gregorio

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