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Banco do Brasil follows Caixa in protest over Odebrecht's bankruptcy plans

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Banco do Brasil follows Caixa in protest over Odebrecht's bankruptcy plans

Banco do Brasil SA has filed a legal complaint in a São Paulo court requesting the annulment of the judicial recovery proceedings of scandal-plagued construction and engineering conglomerate Odebrecht SA, Folha de S.Paulo reported.

Banco do Brasil's complaint pertains to a part of the process which seeks to convert Odebrecht's debt into profit-sharing securities, to be paid out in dividends if and when companies inside the group start generating profits, according to the paper. The bank argues that the plan lacks clarity about how much creditors will collect from this recovery plan.

An estimated 51 billion Brazilian reais of debt will be restructured under Odebrecht's bankruptcy, which was filed in June after years of involvement in corruption and bribery investigations. The company has a six-month term to prepare a recovery plan, which its creditors will vote on.

The move by Banco do Brasil against the conglomerate's offer follows fellow state-run Caixa Econômica Federal's recent and similar complaint. State-run lenders Banco do Estado do Rio Grande do Sul SA, or Banrisul, and Financiadora de Estudos e Projetos SA, or Finep, along with Banco Santander (Brasil) SA and Banco Votorantim SA, have also filed complaints, according to the paper.

As of Oct. 2, US$1 was equivalent to 4.15 Brazilian reais.