Sunday,August 19,2018

General Electric suffers delay payments corruption scandal in Brazil

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General Electric suffers delay payments corruption scandal in Brazil

Brazilian conglomerate Queiroz Galvao has a debt to GE amounting to about 500 million reais (US $ 150 million), according to the source, who asked not to be identified because it is private information.

┬áThe renewable energy business of General Electric in Brazil is facing delays in payments from a customer who is involved in a corruption case, according to two people with direct knowledge of the subject.Brazilian conglomerate Queiroz Galvao has a debt to GE amounting to about 500 million reais (US $ 150 million), according to the source, who asked not to be identified because it is private information. The payments have been withheld because the construction unit of the company has been involved in the investigation known as “Car Wash” which is related to the corruption in the oil giant Petroleo Brasileiro SA.

Another unit, the energy company Queiroz Galvao Energia, bought GE wind turbines and planned to pay with credit development bank in Brazil, BNDES , according to the source. Funding was delayed after the investigations were initiated in its sister company, Construtora Queiroz Galvao.The energy company has five wind farms in northern Brazil with 759 megawatts of capacity in operation or under development, according to its website.

Energy Unit

Queiroz Galvao has had negotiations with GE “because of delays in long – term loans, which were agreed and set out in the business plan of the company , ” according to an email sent by the company to answer questions. The power unit is an independent company that has no relation to the legal issues that are involved in the construction business, said the company based in Rio de Janeiro.

GE declined to comment on the agreements with the customer due to confidentiality requirements.

The delay in payments is the latest sign of the difficulties faced by businesses in the world’s ninth largest economy.Companies are struggling to get financing amid the deepest recession Brazil has seen in over a century, which began two years ago.

The problem is compounded for GE to reducing support for renewable energy. Jerome Pecresse, head of the renewable energy business of the company, said in June that Brazilian customers had late payments and supply chain of wind power in the country was at risk of collapse due to a decrease in demand for turbines.