SAO PAULO, May 11 (Reuters) - TPI Triunfo Participações & Investimentos SA and creditors are discussing terms of a restructuring plan allowing the debt-laden Brazilian infrastructure firm to retain cash from potential asset sales while it downsizes further, three people familiar with the situation said.
Triunfo’s sale of a 50 percent stake in a port to partner MSC Mediterranean Shipping Co SA is ready, one source said. An announcement hinges on whether state development bank BNDES and other Triunfo creditors agree not to use proceeds from the sale to get their loans repaid immediately, the person said.
Triunfo is negotiating terms of the restructuring proposal with creditors individually, two of the people said this week. While there is no exact timetable for presentation of a definitive plan, odds that it could happen over the next two weeks or so are rising, the same people added.
Neither Triunfo nor banks want the highway, airport and port operator to file for bankruptcy protection, the people said. Triunfo has struggled with the impact of Brazil’s three-year recession and a 3.5 billion-real ($1.11 billion) debt burden.
The situation reflects how Brazilian debt restructurings have gained in complexity in recent months, as banks ask more corporate borrowers to put themselves up for sale or dispose of assets as a condition to rework their loans. Such a tack has slowed merger announcements in Brazil.
A spokeswoman for São Paulo-based Triunfo declined to comment. The media office of BNDES did not immediately comment.
One key goal of the plan is convincing BNDES to suspend the foreclosure of an 800 million-real loan to Triunfo, which the company defaulted on late last year, two of the people said.
Itaú Unibanco Holding SA, Banco Santander Brasil SA and state-controlled Banco do Brasil SA are among Triunfo’s creditors. Others include Banco Votorantim SA and Banco Pine SA.
Triunfo borrowed aggressively at the start of the decade to fuel expansion in toll roads, electricity and airports. Still, Brazil’s worst-ever recession has eroded profitability at the company and at least 1 billion reais of Triunfo’s debt will mature by the end of next year.
Without an agreement with creditors, Triunfo could risk the completion of future asset sales, including stakes in an airport and several toll roads. An exit from the port known as Terminal Portuário de Navegantes SA would speed up Triunfo’s downsizing, analysts at Eleven Financial Research said recently.
Reuters reported on March 27 that MSC was likely to exercise a right of first refusal to buy Triunfo’s stake in the port terminal known as PortoNave for an equivalent of 12 times expected operational earnings.
The Geneva-based media office of MSC did not immediately reply to a request for comment.
Apart from PortoNave, Triunfo is looking to sell stakes in companies running Brazil’s Viracopos international airport and a hydropower dam. While news of the PortoNave sale drove Triunfo’s shares to an 11-month high in early April, the stock has since suffered amid a selloff.
Shares are down 29 percent since April 4, when they hit an intraday high of 5.04 reais.
$1 = 3.1563 reais Reporting by Guillermo Parra-Bernal; Editing by Daniel Flynn and Lisa Shumaker