Chinese group to buy Odebrecht Peru asset for $1.39 billion

Date: 28 Aug 2017

A consortium led by China Three Gorges Corp has agreed to buy a hydroelectric plant in Peru from scandal-plagued Brazilian builder Odebrecht SA for $1.39 billion, a person with knowledge of the deal said on 24 Aug.

Odebrecht earlier in the day said it had signed a deal to sell its 456 megawatt Chaglla plant in northern Peru to the consortium. It declined to comment on price.

The deal marks China Three Gorges’ first venture into Peru as the presence of Chinese companies grows in Latin America.

The consortium also includes China’s Hubei Energy Group Co Ltd (000883.SZ), which on Thursday said it would buy 40 percent of the Odebrecht subsidiary that owns Chaglla for $277 million.

Hubei and China Three Gorges, one of the world’s largest hydroelectric power producers, could not be reached for comment.

Odebrecht is at the center of Latin America’s biggest graft scandal having admitted to paying bribes from Peru to Panama. It is trying to shrink its debt as it faces over $2.6 billion in fines and bans on bidding for government contracts in Peru and Argentina.

It said Peru’s justice ministry and Chinese regulators must approve the latest deal before it can be finalized.

The pending sale of another Odebrecht asset in Peru, its Olmos irrigation business, was blocked by the court following a petition from a special attorney who has since been dismissed.

Odebrecht told Reuters this month that it did not expect the sale of other Peru assets to be blocked as earnings generated would help it pay Peru reparations for bribery.

Source: Reuters

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