BRASILIA, (Reuters) – Engineering firm Odebrecht SA signed a roughly 6.7 billion real ($1.94 billion) leniency deal on Thursday with prosecutors in Brazil’s biggest graft case while nearly 80 employees of the company signed plea bargains, sources said.
The long-awaited leniency deal between Latin America’s biggest engineering firm and prosecutors will allow Odebrecht to return to bidding for public works projects, the sources said, confirming an earlier story in the Folha de S.Paulo newspaper.
Under terms of the agreement, the company will pay the hefty fine over 20 years. The money will be divided between authorities in the United States, Switzerland and Brazil, which would be the main beneficiary.
Folha had initially reported the amount could reach 8.6 billion reais ($2.5 billion) once interest was taken into account. Sources told Reuters last week the leniency deal would be signed within days.
While the deal was signed in the southern city of Curitiba on Thursday, company executives, including former Chief Executive Officer Marcelo Odebrecht, signed individual plea bargain agreements in Brasilia, the newspaper said.
The plea bargains are expected to send shockwaves through Brazil’s political establishment as they could incriminate as many as 200 lawmakers for taking graft money from Odebrecht, which prosecutors said had a department dedicated to bribery.
Under the agreements, the executives would become state witnesses and provide prosecutors with details of bribes paid to executives of oil-firm Petrobras and other state companies, plus kickbacks to politicians.
In a letter to employees, the oldest member of the family that controls Odebrecht SA, Chairman Emilio Odebrecht, apologized on Thursday for the conglomerate’s involvement in the Petrobras scandal.
“A lot of work awaits us,” the elder Odebrecht said in the letter, adding that the accord would allow the company to resume growth. “Together, and aligned with the practice of Odebrecht’s ethical and transparency guidelines, we will write a new proud chapter of our history.”
In a separate statement, Odebrecht Chief Executive Officer Newton de Souza said the company was pressing ahead with plans to dispose of non-essential assets in Latin America and in the electricity industry.
Since the company was ensnared in the probe into corruption at Petrobras, more than 5 billion reais worth of assets owned by Odebrecht and its 15 subsidiaries have been sold, the statement said.
De Souza said efforts to restructure the debt of several subisidaries are making rapid progress.
Odebrecht bonds fell, reflecting concern that the size of the agreed fine could hamper the company’s ability to honor an estimated $2.5 billion of bond and loan obligations maturing over the next couple of years.
Odebrecht’s 7.5 percent perpetual bond fell 0.25 cent on the dollar to 57.25 cents on Thursday, from the highest levels in almost a year. At that price, the bond’s yield rose to 13.1 percent from 12.9 percent the prior session.
Bonds in Odebrecht, which has a construction arm and another 14 subsidiaries operating in segments from petrochemicals to defense and oil drilling, has risen since early October on reports the family that manages the group was close to a plea deal.