May 21, 2020 / 12:33 PM / in 15 days

UPDATE 1-Creditors of Brazil's Odebrecht ethanol unit approve restructuring plan

(Adds details on creditors' approval)

SAO PAULO, May 21 (Reuters) - Creditors of Odebrecht's ethanol unit Atvos have approved a restructuring plan, the Brazilian firm said in a statement late on Wednesday.

Under the plan, Atvos expects to reduce its net debt to three times its earnings before interest, tax, depreciation and amortization, a gauge of operational profit known as EBITDA, from the current six times, as it will transfer 46% of its debt to a new vehicle.

It will start paying small suppliers in 90 days. Remaining creditors will start receiving partial payments in 2022.

Atvos offered its financial creditors bonds with rights to access the company's dividends and also with shares and fixed assets as collateral.

Rates of approval went from 77% to 100%, depending on creditor class. Brazil's largest banks - development bank BNDES, state-controlled Banco do Brasil SA, Itau Unibanco Holding SA and Banco Bradesco SA - approved the plan.

Financial creditors will be able to convert between 46% and 61% of their credit in bonds, the company added.

The plan also considers attracting new investors.

Atvos filed for bankruptcy protection a year ago with nearly 12 billion reais ($2.11 billion) in debt after Odebrecht was ensnared in one of Latin America's largest corruption scandals.

$1 = 5.6925 reais Reporting by Tatiana Bautzer and Nayara Figueiredo, writing by Carolina Mandl, Editing by Nick Zieminski

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