(Corrects last paragraph to show the OAS bond was at 12.50 cents on Thursday, not at 13.55 cents on Friday, and that the yield was around 85 percent, not 81 percent.)
SAO PAULO, Jan 30 (Reuters) - A court in Brazil’s São Paulo state seized on Friday 8.9 percent of the shares that construction group OAS SA has in infrastructure company Investimentos e Participações em Infraestrutura SA, alleging that the debt-ridden group is in imminent risk of insolvency.
Judge Roberto Corcioli Filho of the state of São Paulo Justice Court told Reuters that he ordered the seizure at the behest of Pentágono SA DTVM, which as a trustee represents the interests of holders of 160 million reais ($60 million) in OAS local debt notes.
Corcioli’s order followed OAS’s decision to move around some of the 105 million common and preferred shares it owns in the infrastructure firm, known as Invepar. The plaintiffs suspect OAS transferred the shares to protect them from their clients, the note holders, and other creditors, according to court documents.
Corcioli said in a phone interview that the decision was a temporary, pre-emptive measure which could also be appealed. It could be reversed should OAS prove the transfer of the securities was legal, he added. OAS did not have an immediate comment.
The seizure comes as OAS struggles with the impact from a graft and money-laundering scandal afflicting key client Petrobras, which has undercut its own access to financing and revenue flow.
OAS failed to pay interest on $400 million of global bonds and on 100 million reais of debt earlier this year, and bankers are speculating that a sale of the stake in Invepar could help OAS raise cash to honor some obligations. OAS controls a 25 percent stake in Invepar through its wholly controlled OAS Infraestrutura SA subsidiary.
Some of Brazil’s largest civil construction companies are facing increased scrutiny and limited access to bond and loan markets after federal prosecutors found that executives at state-controlled Petrobras negotiated bribes in exchange for building, leasing and other contracts.
The price on OAS’s 8.25 percent bond due in October 2019 was little changed on Friday at 13.60 cents on the dollar, from 12.50 cents on Thusday. At those levels, the yield on the bond is around 85 percent. (Reporting by Guillermo Parra-Bernal; editing by Matthew Lewis)