UPDATE 1-Banco do Brasil expects Sete Brasil finance deal by year-end -CEO

lunes 26 de octubre de 2015 12:25 GYT
 

(Adds context, comments from CEO)

RIO DE JANEIRO Oct 26 (Reuters) - Banco do Brasil SA expects to reach an agreement, along with other creditors, with troubled Brazilian offshore drillship builder and lessor Sete Brasil over its outstanding debts by year-end, the bank's chief executive said on Monday.

State-led Banco do Brasil, which plans to restart a loan program for suppliers of state-run oil company Petroleo Brasileiro SA this week, also aims to help to finance companies bidding for hydroelectric concessions at an auction in November, CEO Alexandre Abreu said.

Sete Brasil owes around $3.6 billion to Banco do Brasil, state-run Caixa Economica Federal, Itau Unibanco Holding SA , Banco Santander Brasil SA and Banco Bradesco SA.

The drillship builder has already missed repayment dates in the past and is negotiating extensions on those payments possibly for next year.

Although he still expects a deal this year, Abreu emphasized that initial repayments should start only in 2016.

"We have a positive expectation for an agreement this year. We want to reach a deal that will allow us to restructure the debt," he said to journalists.

Regarding a scheduled November 6 government auction to sell rights to operate old hydropower plants, Abreu said Banco do Brasil is participating in discussions with other banks to set final terms to finance power companies who win the auction.

The government expects to raise up to 17 billion reais ($4.38 billion) through competitive bidding by utilities hoping to take over expired licenses to operate of 29 hydroelectric dams across the country.

"It is a good deal, because there are no construction risks and 70 percent of the energy will be contracted for concessions running 30 years," Abreu said.

Abreu declined to disclose the names of other banks participating in the pool. ($1 = 3.8797 Brazilian reais) (Reporting by Rodrigo Viga Gaier; Writing by Jeb Blount and Marcelo Teixeira; Editing by Bernadette Baum and Christian Plumb)