Five Brazilian banks are joining British lender Standard Chartered Plc in seeking early repayment of loans to oil rig producer Sete Brasil Participa'es SA, which has been hit by a corruption scandal involving its main client Petrobras, the Estado de S.Paulo newspaper reported on Saturday. The banks are seeking to trigger loan guarantees of 4.5 billion reais ($1.39 billion) to cut their losses on 12 million reais in loans extended to Sete Brasil, a company created to build rigs to tap Brazil's sub-salt offshore oil deposits, the paper said, citing unnamed banking sources.
Sete Brasil said on Friday that Standard Chartered made a formal request to Fundo Garantidor da Constru'o Naval, or FGCN, to trigger guarantees on a loan. FGCN, which provides protection to banks from potential defaults by shipbuilding firms, has 30 business days to study the request, Sete said in a statement.
The Brazilian banks, Banco Bradesco SA, Banco do Brasil SA, Caixa Economica Federal, Ita? Unibanco Holding SA and Banco Santander Brasil SA, had to follow Standard Chartered's lead to get an equal share of the guarantees, Estado reported.
The move aims to put pressure on Brazil's National Development Bank (BNDES) to release long-term financing that has been frozen for years. The situation worsened in recent months when Sete was implicated in the kickback scandal at Petroleo Brasileiro SA, its main client, by a former executive.
A spokeswoman for Sete Brasil said the company had not yet been informed of such a step by the banks. Efforts to contact the banks for comment on the Estado report were unsuccessful.
The corruption scandal led Petrobras to consider cancelling its orders for seven rigs and cut off Sete's access to fresh financing. Sete is 2.5 billion reais in arrears on payments to contractors, the newspaper report said.
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