January 25, 2017 / 3:48 PM / a year ago

UPDATE 1-Peru's Grana says it plans to sell $300 mln in assets

(Adds comments from company, context)

LIMA, Jan 25 (Reuters) - Grana y Montero , Peru’s largest construction group, said Wednesday that it would ask its board to approve the sale of $300 million in assets to help it meet its obligations after it lost a key contract in a graft scandal.

Grana was a junior partner on corruption-plagued Brazilian builder Odebrecht’s $5 billion natural gas pipeline project in Peru, which returned to state control after the group missed a financing deadline on Monday.

Grana said it must pay off some $330 million in debt and guarantees related to the pipeline concession, and is aiming to do so before a public auction of the project’s assets.

Grana expects to recover at least 95 percent of its investments in the project from the auction within a year, including the $220 million that the company paid for a 20 percent stake in the project in 2015.

A divestiture plan will be presented to the company board on Thursday, Grana said.

Odebrecht, a family-owned engineering conglomerate at the center of a growing graft scandal in Latin America, said Tuesday that a $500 million irrigation project that it was building with Grana has been frozen since December pending a government permit.

Peruvian President Pedro Pablo Kuczynski said that Odebrecht must sell its projects and leave the country, after the company acknowledged distributing $29 million in bribes in Peru.

Reporting by Marco Aquino, Writing by Mitra Taj; Editing by Lisa Von Ahn and Alistair Bell

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