The Brazilian conglomerate’s rot was uncovered by Operation Car Wash that resulted in the imprisonment of political and business figures across Latin America, including Brazil’s former richest man, Eike Batista.
After years of graft probes that have tarnished governments throughout Latin America and left a trail of economic destruction in their wake, Brazilian conglomerate Odebrecht SA announced on Monday it was filing for bankruptcy protection. The company aims to restructure debts of 51 billion reais ($13 billion). But as Bloomberg points out, it has total inter-company loans and other debts estimated to be worth 98.5 billion reais ($25.3 billion), which is enough to make Odebrecht’s bankruptcy filing the largest in Latin American history.
The debt restructuring will affect around 15 of the group’s subsidiaries, but will not include assets such as 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.
The bankruptcy filing comes as financial pressures reached a tipping point for Odebrecht, the Brazilian engineering group the rotten core uncovered by Operation Car Wash, an ongoing criminal investigation that resulted in the imprisonment of senior political and business figures from across Latin America, including Brazil’s former richest man, Eike Batista. The corruption scandal has done extensive damage to Brazil’s state-owned oil behemoth Petrobras, turning its bonds from investment grade into junk virtually overnight, and has set back Odebrecht billions of dollars in fines— money it has struggled to pay without putting its own solvency in jeopardy…