(Adds number of employees fired)
By Guillermo Parra-Bernal
SAO PAULO, April 17 (Reuters) - Twenty-eight units of Brazilian engineering firm Grupo Schahin filed for bankruptcy protection and fired 2,500 workers on Friday as a corruption scandal at key client Petróleo Brasileiro SA hampered efforts to refinance up to 6.5 billion reais ($2.1 billion) in debt.
With interests ranging from construction and electricity to oil and gas services, Schahin requested creditor protection in a São Paulo state court. Under terms of the bankruptcy plan, Schahin would exit activities in engineering and construction and focus on oil and gas services.
The company did not specify which units will file for bankruptcy protection. Some bondholders and commercial lenders were concerned that the inclusion of Schahin Engenharia, which guarantees financing for some of the rigs that the oil services unit manages, in the filing could imperil rig operations.
The number of employees fired on Friday represent about two-thirds of Schahin’s total workforce, according to data provided by the company to Reuters.
The firm is the fourth seeking creditor protection in the wake of a probe into the contracting practices between state-controlled Petrobras and some of the nation’s major engineering companies. Refinancing risk has climbed substantially as plunging oil prices and the impact of the Petrobras scandal curtailed access to capital markets.
“The Schahin Group profoundly regrets the dismissals involved in the restructuring of its business, but is confident of the recovery of its business as soon as possible,” São Paulo-based Schahin said in a statement, but did not mention the Petrobras scandal.
Efforts to confirm with Schahin the names of the units involved were unsuccessful.
In recent months, Alumini Engenharia SA, Galvão Engenharia SA and nine units of OAS SA joined the bankruptcy process known in Brazil as “judicial recovery” as fallout from the scandal escalated. Prosecutors say the firms were part of about two dozen companies that paid bribes to Petrobras executives and politicians in exchange for contracts.
Schahin had hired law firm Dias Carneiro, Arystobulo, Flores, Sanches & Thomaz Bastos Advogados to advise on a debt restructuring plan as creditors, including Deutsche Bank AG and Mizuho Financial Group Inc sued to get repayment of a combined $500 million in loans, a source with direct knowledge of the situation told Reuters earlier this month.
A cash shortfall, which the source said has grown to $1 billion, and a rift with Industrial and Commercial Bank of China Ltd over $1.2 billion in loans forced Schahin’s oil services unit to order five of its six exploration rigs to return to the coast earlier this month. Some of them were leased to Petrobras.
$1 = 3.0632 Brazilian reais Editing by Jeffrey Benkoe and Diane Craft