(Adds Odebrecht comment, background)
By Andrés González and Guillermo Parra-Bernal
MADRID/SAO PAULO, June 14 (Reuters) - Odebrecht SA, Latin America’s largest engineering company, is in advanced talks to sell a 55 percent stake in a Peruvian gas pipeline project, and Ferrovial SA and another three companies have emerged as potential bidders, two sources familiar with the transaction said on Tuesday.
According to the sources, who asked for anonymity because the process is under way, Odebrecht and the bidders were waiting for the outcome of Peru’s presidential election to move forward with the plan. Odebrecht aims to raise between $2.2 billion and $2.5 billion from the sale, the first source added.
Gasoducto Sur Peruano, a 30-year concession to build and operate more than 1,000 km (600 miles) of natural gas pipelines across Peru’s southern region, needs $5 billion in investments in coming years. Odebrecht is exiting the pipeline and another three Peru projects as a corruption probe in its home country, Brazil, undercuts its access to credit.
In a statement, Odebrecht said it has hired banks and is analyzing proposals jointly with project partners Enagas SA and Graña y Montero SA. Madrid-based Ferrovial, a construction and infrastructure management company, declined to comment.
As a consequence of the corruption probe, known in Brazil as “Operation Car Wash,” many of Odebrecht’s 15 subsidiaries are refinancing up to 35 billion reais ($10 billion) in loans, and stepping up asset sales, Reuters reported recently, citing sources.
Canada’s Brookfield Asset Management Inc is in advanced talks to buy control of Odebrecht’s water and sewage unit for around 6 billion reais, another source with direct knowledge of the transaction said on Tuesday.
Odebrecht owns 70 percent of Odebrecht Ambiental, as the water and sewage unit is known, with the remaining held by a worker severance fund run by Brazilian state-controlled lender Caixa Econômica Federal.
In March, Salvador, Brazil-based Odebrecht pledged to collaborate with the Car Wash probe, after prosecutors uncovered an office at the group dedicated to paying bribes on work for Brazil state-controlled companies, World Cup soccer stadiums and Olympic legacy projects.
Odebrecht is also selling a stake in a Colombian project, the first source added.
According to the first source, a consortium led by an unidentified Chinese company has also showed interest in the Peru project.
Excluding debt, the project should require equity of around$700 million, brokerage Haitong Securities said in a investor note.
“For Ferrovial, this would be an unconventional investment, so this highlights Ferrovial’s difficulties in finding good investment opportunities in its traditional segments of motorways and airport infrastructure, in our view,” Haitong said.
Spanish newspaper El Confidencial, which first reported the talks on Tuesday, said Ferrovial could team up with Spain’s Enagas, which owns 25 percent of Gasoducto Sur Peruano.
Enagas would acquire another 6 percent of the pipeline, the paper said, citing unnamed sources. Enagas also declined to comment.
Odebrecht is being advised on the Peruvian pipeline project deal by Lima-based investment bank Credicorp Capital and SMBC Nikko Securities.
$1 = 3.4785 Brazilian reais Additional reporting by Tatiana Bautzer in São Paulo, Silvio Cascione in Brasilia, and Robert Hetz and Paul Day in Madrid; Editing by Steve Orlofsky and Cynthia Osterman