July 19, 2016 / 9:02 PM / 2 years ago

Banks reject initial bids on Odebrecht Peru pipeline -news website

LIMA, July 19 (Reuters) - Three initial offers on Odebrecht SA’s 55 percent stake in a $5 billion natural gas pipeline contract in Peru were rejected by the banks that would finance the project, a Peruvian business news website reported on Tuesday.

The banks took issue with two separate proposals by Brookfield Asset Management Inc and Ferrovial SA that would keep Odebrecht involved in the pipeline’s construction, Semana Economica reported, citing anonymous sources.

Potential creditors have demanded that the pipeline project have no links to Odebrecht, an engineering company at the center of a corruption scandal in neighbouring Brazil, known as “Operation Car Wash” but also involves companies that operate in Peru.

A third offer by a consortium formed by Macquarie Infrastructure Corp, Sempra Energy, and privately-held Techint was also rejected by the banks, Semana Economica said.

Odebrecht declined to comment. Brookfield, Macquarie, and Techint did not immediately respond to requests for comment.

Sempra said it could not provide immediate comment. Ferrovial said outside of regular business hours in its headquarters Spain that it would not be able to provide comment until Wednesday.

Reuters reported last month that Odebrecht was in advanced talks to sell its stake in the project and that Ferrovial and another three companies were potential bidders. A source told Reuters then that Odebrecht was aiming to raise between $2.2 billion and $2.5 billion from the sale.

Semana Economica reported that the consortium that includes Macquarie was offering about $550 million and that Ferrovial’s proposal was slightly under that. It said that the banks set an Aug. 15 deadline for the sale.

Odebrecht is being advised on the Peruvian pipeline project deal by Lima-based investment bank Credicorp Capital and SMBC Nikko Securities.

Enagas SA owns 25 percent in the pipeline project and Peruvian construction conglomerate Grana y Montero owns 20 percent. (Reporting By Marco Aquino, Writing by Mitra Taj; editing by Grant McCool)

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