Banks reject initial bids on Odebrecht Peru pipeline

Three initial offers on Odebrecht SA’s 55 percent stake in a $5 billion natural gas pipeline contract in Peru were rejected by the banks that would finance the project, a Peruvian business news website reported on Tuesday.

The banks took issue with two separate proposals by Brookfield Asset Management Inc and Ferrovial SA that would keep Odebrecht involved in the pipeline’s construction, Semana Economica reported, citing anonymous sources.

Potential creditors have demanded that the pipeline project have no links to Odebrecht, an engineering company at the center of a corruption scandal in neighbouring Brazil, known as “Operation Car Wash” but also involves companies that operate in Peru.

A third offer by a consortium formed by Macquarie Infrastructure Corp, Sempra Energy, and privately-held Techint was also rejected by the banks, Semana Economica said.

Odebrecht declined to comment. Brookfield, Macquarie, and Techint did not immediately respond to requests for comment.

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