BRASILIA (Reuters) - Brazilian engineering and construction conglomerate OAS S.A. (OAS.UL) late on Friday unveiled a restructuring plan to a Sao Paulo court, the latest step in a plan to avert bankruptcy amid a corruption scandal at Petróleo Brasileiro SA.
The plan, which still needs approval by the court, laid out two scenarios for the restructuring of about 8 billion reais (£1.6 billion) in debt, both counting on proceeds from asset sales and a debtor-in-possession (DIP) loan. OAS had until June 22 to present a plan.
In a statement, OAS also said it will seek a repayment agreement with some holders of senior notes due 2019 and 2021, and perpetual notes, total ling about $1.775 billion in principal. OAS signed confidentiality agreements with the noteholders to facilitate the discussions.
The company is also seek a DIP loan to continue operating amid the bankruptcy protection plan, the company statement said.
After OAS meets with creditors, the judge overseeing the bankruptcy process may free up a DIP loan of 800 million reais as early as June 26, according to a source with knowledge of the matter.
OAS filed for bankruptcy protection in March after refinancing stalled, shutting access to capital markets after prosecutors accused it of participating in a corruption scheme at state-run oil producer and key client Petrobras. OAS has denied any wrongdoing.
The corruption scandal centred on Petrobras involves billions of reais in contracts between the oil firm and more than two dozen contractors. Also taking a toll on OAS is this year's economic downturn, government austerity and a slumping currency.