SAO PAULO, Sept 19 (Reuters) - A Brazilian state appeals court postponed on Monday a vote on the legality of several aspects of Grupo OAS SA’s restructuring plan for at least a couple of weeks, adding uncertainty to efforts by the debt-laden engineering conglomerate to emerge from bankruptcy protection.
The appeals court in São Paulo agreed earlier in the day to reconvene as early as Oct. 3 to discuss the 19 challenges put forward by a number of local and foreign creditors. Some of the challenges include lengthy repayment timetables and Grupo OAS’s use of asset sales to favor some creditors, court documents showed.
The delay adds to uncertainty over Grupo OAS’s emergence from a painful restructuring triggered by a harsh recession and the group’s involvement in a sweeping corruption scandal. The ongoing delay in the plan has halted the surrender of OAS’s stake in Invepar Investimentos e Participacoes em Infraestrutura SA to creditors, slowing the builder’s recovery.
Some creditors allege they were treated unfairly under terms of a restructuring plan approved late last year by a majority of lenders and the court overseeing Grupo OAS’s bankruptcy protection proceedings, the documents showed.
Under the original plan, OAS gave some lenders a 24.5 percent stake it owned in Invepar in lieu for some debts.
São Paulo-based Grupo OAS filed for bankruptcy protection in March last year to restructure about 8 billion reais ($2.4 billion) in debt.
One key challenge to the plan came from a group of local unsecured creditors led by Pentágono SA DTVM, which said the repayment terms they obtained from OAS in the restructuring plan were worse than those for foreign creditors such as U.S.-based Aurelius Investments LLC.
One of the judges in the three-justice panel asked for a pause to the ruling, citing the need to further analyze evidence against the legality of the plan.
Eduardo Munhoz, Grupo OAS’s attorney, said the company remains optimistic that the panel will drop all the challenges - which might automatically trigger approval of the company’s financial reorganization.
$1 = 3.2823 Brazilian reais Reporting by Ana Mano; Editing by Guillermo Parra-Bernal and Diane Craft