OAS, a construction and engineering firm has requested a bankruptcy court’s protection on Tuesday.
Brazilian engineering conglomerate Grupo OAS tasked by government of Ghana to construct affordable housing units has requested court protection from creditors for nine of its units on Tuesday as it grapples with the fallout from a scandal at state-controlled Petrobras, a major customer in Brazil.
The filing comes after Grupo OAS struggled for months with the effects of a corruption investigation at Petrobras, as the state oil company is known, which undercut the builder's access to financing and contract payments.
An economic downturn, government austerity and a slumping currency have also taken a toll on the company in recent months.
OAS follows rivals Alumini Engenharia and Galvao Engenharia, two other engineering firms that have filed for bankruptcy protection since January as the Petrobras scandal escalated.
Prosecutors say the three firms were part of a cartel that paid bribes to Petrobras executives and politicians in exchange for contracts.
Sao Paulo-based OAS pledged to sell assets to repay debt and inject cash into its heavy construction unit.
Grupo OAS, founded in 1976 by contractor Cesar Mata Pires and his partners in the northeastern city of Salvador, has about 8 billion reais ($2.48 billion) in debt.
"With almost 40 years in the market, OAS felt forced to kick-start a healthy process of debt restructuring that will allow it to preserve thousands of jobs," Fabio Yonamine, president of OAS Investimentos, said in a statement.
Under terms of the petition, which OAS filed in a Sao Paulo state court, the company sought creditor protection for Construtora OAS, OAS, OAS Imoveis, SPE Gestao e Exploracao de Arenas Multiuso, OAS Empreendimentos, OAS Infraestrutura, OAS Investments, OAS Investments GmbH and OAS Finance.
Brazilian police raided OAS headquarters in Sao Paulo late last year and arrested several executives, including the head of its main construction division, as part of a far-reaching investigation known in Brazil as "Operation Car Wash."
The Petrobras scandal made it harder for the company to refinance debt and borrow fresh cash, precipitating a liquidity squeeze that led to its bankruptcy filing. Early this year, OAS failed to pay interest on $400 million of global bonds and on 100 million reais of debt.
Among the assets that the group has put up for sale are stakes in infrastructure operator Investimentos e Participacoes em Infraestrutura, known as Invepar, as well as shipbuilder Estaleiro Enseada, OAS Empreendimentos, waste management firm OAS Solucoes Ambientais, OAS Oleo e Gas and all of its defense unit OAS Defesa.
Those assets, as well as stakes in two soccer stadiums, were excluded from the petition, the statement said.