By Guillermo Parra-Bernal
SAO PAULO, April 20 (Reuters) – Shareholders in Sete Brasil Participações SA voted on Wednesday to allow the ailing rig lessor to seek bankruptcy protection after efforts to secure a long-term contract with state-controlled oil producer Petróleo Brasileiro SA failed.
Petrobras, as Sete Brasil’s sole client is known, confirmed the decision through a spokesperson. A source familiar with the decision told Reuters that partners holding more than 90 percent of Sete Brasil approved the plan, without detailing a timetable or a strategy to do so.
The approval of the creditor protection plan was possible after pension fund Petros, which has 18 percent of Sete Brasil, agreed to back the plan after opposing it for months, said the source, who requested anonymity to speak freely about the issue. Support from a minimum 85 percent of Sete Brasil’s 12 partners were necessary to pass the plan.
The fate of Sete Brasil, which was created in 2008 to manage the world’s biggest deepwater drilling fleet, hinged on Petrobras’ willingness to sign a long-term rent contract. Sete Brasil’s pursuit of an in-court reorganization could force Petrobras to compensate shareholders, creditors and suppliers of the rig lessor for refusing to sign the contract, lawyers have said.
A collapse of Sete Brasil would be devastating not only for the investors that backed the project, but for dozens of shipbuilders supplying the company. More than 800,000 local shipbuilding jobs could be lost, triggering 40 billion reais ($11.3 billion) in losses, industry estimates show.
The ballot gives management of Rio de Janeiro-based Sete Brasil power to decide when and where to file for court protection, which shareholders in the rig lessor saw as the only way to press Petrobras into signing a favorable contract. Sete Brasil declined to comment.
Petrobras Chief Executive Officer Aldemir Bendine and officials at the company’s exploration and production division remain at loggerheads over the contract, with the latter seeking a collapse of the rig leaser, the source added.
($1 = 3.5277 Brazilian reais) (Additional reporting by Tatiana Bautzer, Marcelo Teixeira and Aluísio Alves in São Paulo; editing by Andrew Hay)
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