Odebrecht selling $3.4bn in assets

In the face of a massive corruption probe in Brazil, Odebrecht is looking for liquidity.

Latin America's largest construction company is putting $3.4 billion in assets up for sale in order to free up liquidity, company president Newton de Souza has confirmed. 

In an interview with Brazilian newspaper Folha de Sao Paulo, de Souza told reporters that Odebrecht has initiated an “accelerated process” to liquidate certain of its assets. 

These include a hydroelectric plant in Peru as well as a highway in that country already in the process of due diligence, de Souza said, along with wind energy assets in the southern Brazilian state of Rio Grande do Sul. Water and sewage unit Odebrecht Ambiental has also received interest. Other assets up for sale include an oil block stake and a participation in a diamond mine in Angola. 

Sale of Peru's Chaglla hydroelectric dam, which was indicated in news reports late last year as an asset Odebrecht was considering offloading, is expected to generate $900 million.

Sources have told Infrastructure Investor that buyers are also circling Odebrecht's stake in a Peruvian pipeline, but de Souza did not mention that in his interview. Rumors circulated last week among Brazilian advisers that the company was looking to sell assets it holds in Petrobras via Braskem, as well as shareholdings in special purpose entities holding infrastructure projects.

In November, the company hired asset manager Lazard to help offload some of the assets owned by its Odebrecht Transport unit, including its 15 percent stake in the Line 4 project for the Sao Paulo subway, local news reports confirmed. Folha de Sao Paulo discovered at the time that Odebrecht was interested in selling a 30 to 40 percent stake in its Rodovias division, which holds its toll road concessions, along with a 40 percent stake in military defense company Mectron.

The company has culled its workforce to 120,000 from 190,000, cutting 70,000 jobs in the past 18 months, de Souza said. Even in the face of Lava Jato, the company was able to raise its revenue to BRL132 billion from BRL107 billion in 2014 due to exchange rate fluctuations, given that much of Odebrecht's business is offshore.

Along with the asset sales, Odebrecht is in the process of creating new governance and compliance structures, de Souza said.