(Adds details about creditors and companies involved in the renegotiation)

By Tatiana Bautzer and Carolina Mandl

SAO PAULO, Nov 29 (Reuters) – Brazilian construction conglomerate Odebrecht SA is working with local restructuring firm RK Partners to renegotiate a portion of its bank debt, four sources with knowledge of the matter said on Thursday.

RK Partners is the second restructuring firm the corruption-ensnared conglomerate has hired recently.

Earlier this week, Odebrecht has announced it had hired Moelis & Co and two law firms to restructure $3 billion in bonds issued by its Odebrecht Finance unit.

One of the people said Odebrecht had hired RK Partners to discuss how the company could retain at least part of the proceeds of the sale of assets such as Peru’s Chaglla hydroelectric plant and a stake in Brazil’s Santo Antonio hydroelectric plant rather than surrendering the full amount to creditors.

The sources asked for anonymity because they were not authorized to discuss the matter publicly.

This is a much broader renegotiation than the one Odebrecht led in May.

One source said that the renegotiation may involve subsidiaries such as real estate company OR, mobility firm Odebrecht Transport and agroindustrial company Atvos, along with construction unit Odebrecht Engenharia e Construção.

Odebrecht’s initial plan was to sell assets in some of these companies to pay off debt, but that was not practical.

Besides private lenders such as Bradesco, Itaú and Banco Santander SA, Odebrecht has among its creditors state-controlled banks BNDES, Banco do Brasil SA, Caixa Econômica Federal and FI-FGTS workers severance fund.

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Odebrecht and affiliated company Braskem SA agreed in December 2016 to pay at least $3.5 billion to authorities in the United States, Brazil and Switzerland, to resolve charges involving payoffs to state oil company Petroleo Brasileiro SA and others. At the time, it was the largest penalty in a foreign bribery case.

Since then, it has been negotiating plea deals to settle corruption charges in Latin American countries.

Its construction unit, which used to be the group’s cash cow, has struggled to win new contracts in Brazil and elsewhere in Latin America.

Peru’s Justice Ministry said on Thursday it had reached an agreement with Odebrecht that allows the conglomerate to proceed with the sale of the Chaglla hydroelectric plant.

Moelis and the two law firms will solely be in charge of the discussions with bondholders, two of the sources added. RK is working with Odebrecht to push for an extension of maturities in its debt with Brazilian lenders.

Odebrecht does not have the power to force banks to negotiate, since a large chunk of its 70 billion reais ($18.17 billion) debt is collateralized with its stake in Braskem, a listed petrochemical company.

Odebrecht is in talks to sell its stake in Braskem to Lyondell Basell Industries NV or convert its stake into shares in a new combined company, but any such deal requires authorization from the banks.

Odebrecht and RK declined to comment on the matter. ($1 = 3.8526 reais) (Reporting by Tatiana Bautzer Editing by David Gregorio and Phil Berlowitz)



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