Odebrecht: the mother of all bankruptcies
The Bahia-based Odebrecht Group has filed for court-supervised reorganization—the last step before bankruptcy. With debts of BRL 98.5bn, the company—which was a symbol of the Brazilian economic bonanza of the 2000s—is now at the center of the biggest administration process in the country’s history. The request caps off its fall from grace, which started in 2015 with the launch of Operation Car Wash.
For the time being, the reorganization process will not include Braskem—Odebrecht’s petrochemical branch and biggest asset. Of the total debt amount, BRL 33bn can’t be renegotiated, as they are between companies of the group itself. The companies’ biggest creditors are three public banks: the BNDES (National Development Bank), Banco do Brasil, and Caixa.
For decades, bribery and corruption were the pillars of the business model at Odebrecht. So much so that Brazil’s largest construction firm had an entire department exclusively dedicated to the payment of bribes to public officials. The company was instrumental in misappropriating at least BRL 7 billion from Petrobras, according to the oil company’s own predictions.
And while many people like to point the finger at former President Lula and...