The fallout from Odebrecht’s admission of foreign bribery will likely affect its engineering and construction business, as well as its consortium partners throughout Latin America, warn Brock Edgar and Devi Rajani from FTI Consulting.
Brock Edgar and Devi Rajani report in LatinVest about this issue that affects all of Lat Am.
Can Latin American construction companies survive an expected plateau in gross fixed capital formation in a region that so desperately needs infrastructure investment?
In recent years, Latin American construction companies have faced deteriorating cash flows due to overexpansion at home or abroad, limited financing availability due to changing regulations and/or government investigations (i.e., “Lava Jato” in Brazil, also known as the Car Wash Investigation), falling commodity prices (primarily oil) and cutbacks in government spending; all of which have led to over-levered financial positions.