SAO PAULO, Aug 10 (Reuters) - Grupo Odebrecht SA, the engineering company ensnared in Brazil’s worst corruption scandal, has hired law firm E. Munhoz Advogados to advise on restructuring debt of more than 100 billion reais ($32 billion), a source with direct knowledge of the situation said on Wednesday.
Founded by corporate restructuring lawyer Eduardo Munhoz, the law firm has been working with Grupo Odebrecht since December in bank and bond debt issues, said the source, who requested anonymity because the matter is private.
Munhoz has advised Grupo Odebrecht on restructuring of 13 billion reais in liabilities at sugar, ethanol and power unit Odebrecht Agroindustrial SA and a debt renegotiation at oil and gas drilling unit Odebrecht Óleo & Gás SA.
The source said that Munhoz’s hiring is not aimed at preparing Grupo Odebrecht, Brazil’s largest private-sector employer, for an in-court reorganization. The Salvador, Brazil-based firm denied a report by Brazil Journal blog that an accommodation with creditors was under way.
Odebrecht did not have an immediate comment, while Sao Paulo-based E. Munhoz Advogados declined to comment. Bloomberg News first reported the hiring of Munhoz earlier on Wednesday.
Reuters reported in April that Odebrecht had entered talks with banks to refinance up to 35 billion reais in loans, following the involvement of Latin America’s largest engineering group in a corruption scandal that curtailed access to funding. While the company has sold some assets, other processes have hit a snag as a result of the scandal.
Some of the restructuring and reorganization processes in which Munhoz has participated as legal advisor includes OGX Petróleo & Gás Participacoes SA’s $3.6 billion bond default in 2013, the largest in Latin America to date, and the bankruptcy protection filing for Odebrecht rival OAS SA.
$1 = 3.1276 Brazilian reais Reporting by Guillermo Parra-Bernal; editing by Grant McCool