Odebrecht Transport Invests $7 Billion in Brazil Projects

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  • Posted on December 23, 2013


    Odebrecht Transport, which won an auction to jointly run Rio’s international airport last month, is planning to invest $7 billion in new infrastructure over the next three years.

     

    The unit of Odebrecht SA, is building 18 projects including roads and rail systems, Chief Executive Officer Paulo Cesena said in a telephone interview today. Financing will come from public and private banks and infrastructure bonds, he said. An initial public offering will also be a “natural next step” for the company, though unlikely in 2014, Cesena said.

     

    Cesena’s comment framed the scope of spending planned by Odebrecht as the Sao Paulo-based company takes advantage of infrastructure concessions being sold by the government. President Dilma Rousseff is trying to attract private funds to eliminate infrastructure bottlenecks damping growth in Latin America’s largest economy.

     

    “Our big challenge is mobilization and managing these projects,” Cesena said. “It’s a big challenge in management to get these things done in the short time frame allotted by the government.”

     

    Odebrecht is in discussions with local and international groups for long-term investment of as much as 40 percent in its four units: ports, airports, roads and urban transportation, Cesena said.

     

    Separately, Brazil’s development bank, known as BNDESPar, said today it will take an 11 percent stake in Odebrecht Transport, in exchange for a 1 billion-reais ($423 million) investment. FI-FGTS, the investment arm of Brazil’s workers compensation fund, will pump an additional 429 million reais into the company, keeping its 30 percent stake.

     

    The sale values Odebrecht Transport at about $3.8 billion, according to data compiled by Bloomberg.

     

    To contact the reporter on this story: Christiana Sciaudone in Sao Paulo at csciaudone@bloomberg.net

     

    To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

    Bloomberg/AC



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