UPDATE 1-Brazil's Odebrecht to miss Wednesday bond payment -source
(Adds details of talks)
By Tatiana Bautzer and Carolina Mandl
SAO PAULO, April 24 (Reuters) - Brazilian engineering group Odebrecht SA will not repay a bond worth 500 million reais ($144 million) due on Wednesday and is counting on bank loans to make the payment during a 30-day grace period, a person with direct knowledge of the matter said on Tuesday.
Construction unit Odebrecht Engenharia e Construção (OEC) is waiting for its parent to conclude an agreement with Brazilian lenders that will allow the unit to repay the bond, the source added, asking for anonymity since talks are still private.
In a statement earlier on Tuesday, OEC said it expected to pay within the grace period, and the source added that the unit does not intend to take the full 30 days. The company also owes other interest payments totaling $11 million later this month.
Odebrecht declined to comment. It has been in talks to secure new loans for months, but has not yet reached an agreement with Brazilian lenders, four sources with knowledge of the matter said on Tuesday.
Banks are in talks to immediately extend new loans worth 2.2 billion reais to 2.6 billion reais, lower than Odebrecht’s initial request of 3 billion reais, two of the sources said.
Reuters reported on Thursday that the main problem in negotiations with lenders was accommodating their divergent views regarding collateral.
State-run Banco do Brasil SA has resisted giving private-sector banks privileged access to collateral as they requested, four sources said.
State development bank BNDES is also deciding whether to waive some guarantees if private-sector banks Banco Bradesco SA and Itaú Unibanco Holding SA extend new loans.
Banks say Odebrecht’s asset sale program is running behind schedule. So far, the conglomerate sold 12 billion reais in assets, but only received about 7 billion reais, as legal problems have snagged payments, one source said.
Reuters reported in April that Odebrecht agreed to sell a real estate project in Sao Paulo for 400 million reais. But the proceeds will only be available by June, according to a fifth source with knowledge of the matter.
Odebrecht is also trying to sell its stake in Brazilian suburban rail operator Supervia, but has not reached a deal with potential buyers, a sixth source with knowledge of the talks said.