Odebrechts financial problems
THE BRAZILIAN construction company Odebrecht, working on Panama projects worth $3 billion has a high risk of defaulting on its debts says a Moody’s report issued Thursday October 20.
The company is facing serious financing issues due to a decision to lower its credit rating.
Moody’s has lowered its rating from ‘B3’ to ‘Caa1’. This means that the company has a high risk of defaulting on its debts.
The report stated: “Despite its experience and strong track record of executing complex engineering projects, its position in the market has been severely questioned by allegations of corruption in the process.”
The report specifically cited the Lava Jato case, in which the company is accused of bribing state officials in Brazil in exchange for contracts from the government-owned oil company Petrobras.
The credit downgrade will mean that the company will experience more difficulties in obtaining financing.
State contracts
Odebrecht is the largest contractor of the Panamanian state.
It has received contracts to build line 2 of the Metro, the Colón urban development project and the expansion of Tocumen International Airport.
These projects are worth more than $3 billion.
It also has a road contract with the city. It has also been approved as a bidder for the $1 billion fourth bridge over the Panama Canal.
