Sempra drops bid for Odebrecht pipeline in Peru, Techint in talks
(Rewrites throughout after Sempra Energy statement on ending talks)
LIMA, Nov 23 (Reuters) - Sempra Energy said on Wednesday that it ended talks for buying control of Brazilian engineering company Odebrecht's pipeline project in Peru without a deal as Techint Group remained in negotiations for acquiring a minority stake.
Sempra said the government of Peruvian President Pedro Pablo Kuczynski had refused to offer guarantees that it would not rescind the pipeline contract if Odebrecht or its affiliates were found to have broken the law.
"As a consequence, a fundamental condition that was required for us to consider entering into final and binding agreement was not satisfied," Sempra said in a statement.
Odebrecht is the center of Brazil's biggest graft scandal and Peruvian prosecutors have been investigating potential wrongdoing in the awarding of the pipeline contract, which Odebrecht won in a 2014 public auction after its sole competitor was disqualified at the last minute.
Banks that would provide a $4.1 billion syndicated loan for the pipeline's construction have said Odebrecht must exit the project before it disburses the funds.
Italian industrial group Techint said it remains in negotiations to buy a 5 percent stake in the pipeline project from Odebrecht, which controls 55 percent. "For Techint, nothing has changed," the company said in a statement.
Odebrecht declined to comment.
Peru's government has said it was considering holding a new auction to find a builder and operator of the project after Odebrecht's attempt to sell its stake was snagged on corruption concerns.
Odebrecht executives agreed to plea bargains and a leniency deal in Brazil under which it would pay around 7 billion reais ($2.1 billion) in fines for its role the corruption scandal, a person familiar with the matter said on Wednesday.
(Reporting by Marco Aquino and Mitra Taj; editing by Leslie Adler and Grant McCool)