(Bloomberg) -- Creditors of Odebrecht SA's engineering and construction division holding more than $1 billion of the Brazilian company's bonds said they have proposed a debt restructuring, including a four-year extension of maturity.
Odebrecht hasn't responded yet to the proposal, which was presented on Wednesday, the creditor group said in a statement.
The company was said in December to be running out of collateral it can pledge to creditors of its scandal-plagued construction unit. The subsidiary, Odebrecht Engenharia e Construcao SA, said in November that it will restructure debt after missing a coupon payment.
Key terms of the proposal include:
- a four-year maturity extension, along with the ability to pay all interest in kind through 2021 at the company's option in order to preserve cash
- no reduction in principal amount, no impairment of the equity interests of Odebrecht
- other terms such as an enhanced covenant package, including prohibition on dividends and other restricted payments until notes have been fully repaid, and a guarantee from Odebrecht and liens on certain assets, including shares of Braskem
The company was planning to ask bondholders to accept losses of more than 70 percent as part of a restructuring of about $3 billion in outstanding bonds, Reuters reported last month.
To contact the reporter on this story: Edith Moy in New York at echan10@bloomberg.net
To contact the editors responsible for this story: James Ludden at jludden@bloomberg.net, Virginia Van Natta, Tony Czuczka
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