Communication

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Odebrecht S.A., the holding company of the Odebrecht Group, has just signed an agreement that will ensure greater peace of mind for executing its restructuring plan and gradually recovering all of its business. Under the agreements, the group will receive a cash injection of R$2.5 billion, which is sufficient to cover its cash requirements for approximately two years.
 
“The agreements we’ve signed help us to return our gaze to the future,” said Newton de Souza, the group’s CEO. “We won’t forget the past. We’re paying a high price for our mistakes. But these agreements will allow us to invest in liquidity and to resume growth in our construction and infrastructure businesses, always grounded in ethics, integrity and transparency, and under a new business model that combines two characteristics: high-quality governance practices on par with those of public corporations and a Compliance System that is as agile and rigorous as those of the world’s largest, most efficient and most respected companies,” concluded Newton.
 
One of the agreements signed by Odebrecht consummates the divestment of Odebrecht Ambiental. The company was founded by Odebrecht in 2008 and became Brazil’s largest private sanitation provider, serving over 17 million people in 12 states with water supply and sewage treatment services. The 70% interest held by Odebrecht in Ambiental was acquired by Brookfield Business Partners LP, jointly with other institutional partners. The investment fund FI-FGTS holds the remaining 30% interest in the company. 
 
Odebrecht also signed an agreement with a group formed by Brazil’s largest banks, all of which are long-time partners. Under the agreement, the proceeds from the sale of Ambiental will not be used to prepay the debt held at such banks. Instead, the proceeds will be used by Odebrecht to ensure the liquidity of its businesses and to honor commitments with the capital markets. 
 
The operations announced by Odebrecht are part of the group’s broader strategic plan adopted since last year. The initial focus was on liquidity, given the scenario of tight credit sparked by the economic crisis and aggravated by Operation Car Wash. An asset divestment program is also taking place at each Business and at the holding company, of which the divestment of Odebrecht Ambiental is a part.
 
Meanwhile, Odebrecht has redesigned its governance model. It increased the number of independent directors on the boards of its companies. It created Compliance Committees advising the Board of Directors at each of its businesses and subsidiaries. Today the group has nine Chief Compliance Officers (CCOs) operating independently from management, in addition to more than 50 people who are implementing a new policy and the new Compliance System.
 
Odebrecht’s “permanent collaboration with the authorities” that it announced one year ago led 77 current and former executives of the group to make revelations that have been widely disclosed in videos in recent days. The testimonies, which were given in connection with the agreement with the Federal Prosecution Office (MPF), describe details and present evidence of dozens of cases of corruption, unveiling more than one decade of relations between the group with public administrators, government agencies, politicians and political parties.
 
Odebrecht signed a Leniency Agreement with Brazil’s Federal Prosecution Office (MPF) and with U.S. and Swiss authorities that imposes financial penalties and other sanctions, but also allows the group once again to bid on government contracts and apply for government financing. Also as a result of the Leniency Agreement, since March of this year, two external independent monitors are accompanying the group’s day-to-day operations to ensure that it indeed has changed its attitude.
 
“After the impact we suffered, we are now taking steps to stabilize the group and create the conditions for resuming growth as soon as the country’s economy improves. We already have the instruments in place to adequately treat and quickly respond to any insinuation or threat of corruption or wrongdoings. Our relationship with the government will never be the same. We are turning the page,” said Newton de Souza, CEO of Odebrecht S.A