(Story originally published Feb 17. Removes erroneous reference to Mizuho Financial Group as one of company’s biggest creditors in paragraph 4)
By Tatiana Bautzer
SAO PAULO, Feb 17 (Reuters) - Creditors of ailing Brazilian engineering and rig leasing conglomerate Grupo Schahin rejected on Wednesday a reorganization plan, a source with direct knowledge of the decision said.
The decision could pave the way for Schahin’s liquidation, said the source, who is not authorized to discuss the issue publicly. All 13 banks that are creditors of Schahin, a family-controlled group, voted against the plan to restructure around 6 billion reais ($1.5 billion) in debt, the source added.
Schahin’s lawyers plan to challenge the decision before São Paulo-based bankruptcy judge Marcelo Sacramone, who was analyzing the bankruptcy protection request that Schahin had introduced back in April, the same source added. The lawyers plan to argue that the creditors went beyond legal limits when they voted down the plan, the source said.
If the lawyers succeed, Schahin may avoid bankruptcy.
Schahin was the fourth company that sought creditor protection last year in the wake of a probe into the contracting practices between state-controlled oil producer Petróleo Brasileiro SA and some of the nation’s major engineering groups. Refinancing risk climbed substantially as plunging oil prices and the impact of the Petrobras scandal curtailed access to funding.
Schahin did not have an immediate comment. The company hired law firm Dias Carneiro, Arystobulo, Flores, Sanches & Thomaz Bastos Advogados to advise on the plan.
Other groups involved in the the so-called “Operation Car Wash” scandal, such as Grupo OAS SA, have obtained creditors’ approval to pursue their reorganizations.
$1 = 3.9832 Brazilian reais Reporting by Tatiana Bautzer; Editing by Guillermo Parra-Bernal, Chris Reese and Andrew Hay