In 2016, the financial management of Odebrecht S.A. focused on liquidity, capital adequacy through the asset demobilization program, and the financial restructuring of businesses that were heavily affected by a scenario of credit restriction and economic crisis.
Highlights included the financial restructurings of three Businesses:
Odebrecht Agroindustrial – It completed in July 2016 the renegotiation of its debt and the strengthening of its capital structure, with the commitment of creditors and shareholders, which enabled the maintenance of approximately 11,500 jobs. The operation had a capitalization of R$6 billion by the shareholder. Currently, the company has a leverage compatible with its cash generation, with a total payment term of 13 years, including a grace period of five years. One aspect worth mentioning is the evolution of the operational performance of the Business in 2016.
Enseada Shipbuilding Company – Heavily affected by the shutdown of the activities of Sete Brasil, which triggered a financial crisis in the sector, Enseada Shipbuilding Company had its business plan revised. Odebrecht S.A., which holds a 35% equity interest in Enseada, made financial contributions that ensured the maintenance of business operations and supported the orderly and respectful demobilization of approximately 8,000 employees. The company’s extrajudicial recovery proposal was filed in January 2017, in order to stabilize the business and continue operations through a new strategic positioning.
Odebrecht Oil & Gas – Since late 2015, Odebrecht Oil & Gas has been engaged in constructive discussions with the holders of bonds due in 2021 and 2022. Such negotiations became necessary after the cancellation by Petrobras, in September 2015, of the ODN Tay IV probe charter and operation contracts, which were to remain in force until 2020. In May 2017, Odebrecht Oil & Gas signed an agreement with most of the creditors for the financial restructuring of roughly $5 billion in debt through an extrajudicial recovery proceeding. The company’s assets that are currently in operation present good performance. Odebrecht Oil & Gas has sufficient resources to continue operating these assets.
Sale of assets
Odebrecht S.A. evolved during the year in its asset disposal plan valued at approximately R$ 12 billion, concluding important negotiations. By December 2016, sales totaled approximately R$ 5 billion, in negotiations that also enabled the reduction of roughly R$ 5.9 billion in its gross debt.
- » Sale of 57% of the Rutas de Lima concessionaire to Brookfield Business Partners LP.
- » Sale of Odebrecht Energias Alternativas, holder of the Corredor Senandes Wind Power complex to the NC Group.
- » Sale of Odebrecht Ambiental to Brookfield.
- » Sale of Concessionário Trasvase Olmos S.A. (CTO) and H2Olmos S.A., concessions of the Olmos Irrigation Project in Peru, to Brookfield Infrastructure and Suez.
Other assets under analysis and negotiation for sale include the 28.6% equity stake in Santo Antônio Energia and a hydropower plant in Peru. Moreover, the reimbursement for investments made in Peru’s gas pipeline, a concession canceled by the country’s government, is expected to occur in 2017, following an auction to be conducted by the Peruvian Government.
Business Economic Performance
Note: The financial statements are in the final stages of elaboration.
In the Gross Revenue and EBITDA amounts, the conversion was made at the average exchange rate for each year: 2016 (US$ 1 = R$ 3.4899); 2015 (US$ 1 = R$ 3.3876); 2014 (US$ 1 = R$ 2.3536); 2013 (US$ 1 = R$ 3.3426); 2012 (US$ 1 = R$ 2.0435).