Soares da Costa may sell assets in Mozambique to stave off bankruptcy

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Soares da Costa may sell assets in Mozambique to stave off bankruptcy

1:45 CAT | 08 Feb 2017

Logotipo da construtora Soares da Costa, em Lisboa, 23 de abril de 2012. MARIO CRUZ/LUSA

Infodiário / The Nacala railway corridor is one of Soares da Costa's largest Mozambican contracts.

Portuguese construction company Soares da Costa, involved in several construction projects in Mozambique, has been facing insolvency since August of last year, with a level of indebtedness exceeding income.

The construction company’s recovery proposal, which involves selling assets including all of its businesses in Mozambique in the first half of this year, is currently being scrutinized by a judge.

According to yesterday’s edition of Portuguese newspaper ‘Público’, the recovery plan presented by Soares da Costa’s management received a 51.08 percent vote in favour from creditors. Although by only a slim margin, this allows the company to advance its recovery plan. Ninety-eight percent of the credits voted. The main creditor, the Caixa Geral de Depósitos group, with nearly 30 percent of shares, voted against the proposal.

The vote represents first good news in a suspenseful recent few weeks for the company, which is just year away from celebrating its centenary, but it is not yet final and still needs to be approved by a judge on a ten-day deadline.

The uncertainty surrounding the Caixa Geral de Depósitos vote were confirmed. “It was mainly the votes of suppliers and workers that allowed the viability plan to go forward,” insolvency administrator Pedro Pidwell told ‘Público’.

With EUR 696.7 million owed to it, the bank was asked to write off 75 percent of the company’s Euro debts and 35 percent of debt contracted in tKwanzas, the Angolan currency, with the remainder to be paid off in 18 years. In a lawsuit involving nearly 3,000 creditors, less than five percent of the votes were void

The Nacala railway corridor is one of Soares da Costa’s largest Mozambican contracts.

Source: O País