Grupo BTG Pactual and other investors in a troubled drilling-rig supplier will meet this month and decide whether Sete Brasil Participacoes SA will file for bankruptcy protection after oil prices collapsed and it was cited in a sprawling corruption scandal, four people with direct knowledge of the matter said.
Shareholders may vote to seek legal protection from creditors for the venture in a Jan. 21 meeting, which would be the first step toward an eventual liquidation of the Rio de Janeiro-based company’s assets, according to the people, who asked not to be identified discussing a private matter. One of the people said a vote for a filing is unlikely this month, adding that under Brazilian law the company might also avoid liquidation through a restructuring either inside or outside the bankruptcy process.
Sete Brasil, which once boasted of ambitions to build the world’s biggest deep-water drilling fleet, joins more than a dozen companies crippled by a 22-month-old corruption investigation that has helped tip Brazil into recession and left the nation’s leaders fighting for their political survival. A possible bankruptcy filing could mark the beginning of a new wave of financial pain for Brazilian companies as key Sete shareholders that include Petroleo Brasileiro SA, Brazil’s biggest banks and pension funds would be forced to write off loans or stakes in the rig supplier. Many have already booked some of those losses.
Brazil Energy Insight 
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