By Francisco Marcelino
(Bloomberg) — Shareholders of oil-rig venture Sete Brasil Participacoes SA agreed to a plan to file for bankruptcy protection after its single client failed to present a viable book order.
A Sete Brasil official confirmed Wednesday that investors are backing the plan and declined to elaborate. Shareholders had set that day as a deadline for Petroleo Brasileiro SA to propose a book order that could pay back the capital they had injected into the company, according to two people involved in the private talks who asked not be identified. Petrobras, which is a shareholder and Sete’s only client, didn’t vote, they said.
The company may list about 18 billion reais ($5.1 billion) in liabilities, one of the people said. Law firm Sergio Bermudes Advogados in Rio de Janeiro will work on the bankruptcy plans, according to the people.
A spokesman for the law firm declined to comment, and a representative of Petrobras didn’t immediately respond to a message seeking comment.
The oil-rig operator was created in 2011 to build the world’s biggest deep-water drilling fleet for Brazil’s state-run crude producer. Petrobras later cut the number of rigs it planned to lease from Sete to 10 from 28 amid plunging oil prices and the nation’s biggest-ever corruption probe, which jailed several of Petrobras’s former executives. The smaller order wouldn’t be enough to repay 8.25 billion reais that shareholders invested in Sete Brasil, forcing them to inject more money into the business, the people said.
The shareholders, which include Grupo BTG Pactual and Banco Santander SA, among others, have been discussing the bankruptcy filing for at least three months, according to people involved in the talks. Creditors, which loaned about $3.6 billion and include Banco Bradesco SA and Itau Unibanco Holding SA, had repeatedly renewed a standstill loan as Brazil’s BNDES development bank froze a 10 billion-real loan to Sete Brasil last year. The current standstill will mature next month.
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