Ailing Brazil rig producer may get $1.5 bln in loans, sources say
By Guillermo Parra-Bernal and Aluísio Alves
SAO PAULO Jan 14 (Reuters) - Brazilian state-controlled lenders BNDES and Banco do Brasil SA are close to disbursing over 4 billion reais ($1.5 billion) in loans to ailing oil rig producer Sete Brasil Participações SA, two sources with knowledge of the deal said on Wednesday.
Sete Brasil could get part of BNDES' loan worth 10 billion reais by the end of February, said a first source who requested anonymity since talks are underway. BNDES delayed disbursement of the loan for about two years, citing a lack of guarantees, the same source added.
Between 3 billion reais and 3.5 billion reais could be disbursed from the first portion of the BNDES loan, the source added. Sete Brasil, BNDES and Banco do Brasil declined to comment.
In addition, Banco do Brasil could extend a bridge loan of 800 million reais to help Sete Brasil meet short-term funding needs, the second source noted. The loan is key to help Sete Brasil avert a technical default on some of the company's 13 billion reais debt.
Sete Brasil plans to spend over $25 billion by the end of the decade to build as many as 29 deep-water drilling platforms that will be leased to Brazil's state-controlled oil producer Petróleo Brasileiro SA. Petrobras, as the oil producer is known, is among Sete Brasil's main shareholders.
The rig producer is reeling from cash flow problems stemming from payment delays and rising borrowing costs. Sete Brasil faces 11 billion reais in debt repayments before the end of the second quarter.
(Reporting by Guillermo Parra-Bernal; Editing by Meredith Mazzilli)
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