Brazil's OAS says scandal, restructuring to halve revenue
SAO PAULO, April 22 (Reuters) - Brazilian engineering conglomerate Grupo OAS expects revenue to shrink more than 50 percent by 2017 as it sells operations and refocuses on civil construction after filing for bankruptcy protection due to a bribery scandal at a state-run oil company.
The filing by OAS, the third-biggest builder in Brazil last year, was the highest-profile bankruptcy filing to follow a sweeping police investigation of a price-fixing and kickback scheme at state-controlled Petroleo Brasileiro SA, or Petrobras.
In a restructuring plan presented to journalists on Wednesday, OAS executives said the group's net revenue would plunge to around 3.133 billion reais ($1.04 billion) in 2017 from 7.151 billion reais in 2014.
They said OAS hopes to start talks by the end of the month with creditors on how to restructure the 8 billion reais that the group owes to banks, suppliers and bondholders.
Brazilian police raided OAS headquarters in São Paulo late last year and arrested several executives, including the head of its main construction division, as part of a far-reaching investigation known in Brazil as "Operation Car Wash".
The Petrobras scandal made it harder for the company to refinance debt and borrow new cash, triggering a liquidity squeeze that led to its bankruptcy filing. Early this year, OAS failed to pay interest on $400 million of global bonds and on 100 million reais of debt.
Next year, OAS plans to focus exclusively on infrastructure and transportation projects, executives said.
By the end of 2016, they said, the group will also have sold most assets held by OAS Investimentos, which include a 25 percent stake in Invepar, part of the consortium that runs São Paulo's Guarulhos International Airport.
($1=3.01 Brazilian reais) (Reporting by Alberto Alerigi Jr.; Writing by Brad Haynes; Editing by Peter Galloway)
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