SHARE

Sete Brasil shareholders voted on Wednesday to allow the firm to seek bankruptcy protection.

Petrobras told Reuters that Sete Brasil shareholders voted to allow a bankruptcy protection filing after the rig firm failed to secure a long-term contract with Petrobras.

Sete Brasil is a state-owned rig firm established in December 2010 to provide vessels to Petrobras.

A source familiar with the matter told Reuters that partners who hold more than 90 percent of Sete Brasil approved the plan.

Sete Brasil told Bloomberg that shareholders had approved the plan but did not disclose further details.

Industry estimates seen by Reuters show that the bankruptcy could trigger $11.3 billion in losses and could jeopardize as many as 800,000 local shipbuilding jobs.

If Sete Brasil decides to move forward with an in-court reorganization Petrobras could be forced to compensate the rig firm’s shareholders, creditors and suppliers for its refusal to sign the long-term contract, Reuters said.

Singapore-based Keppel Corporation said in January that it has halted construction work on six new rigs for Sete Brasil after the rig firm failed to pay Keppel for over a year.

Sete Brasil has also been dragged into the ongoing Petrobras corruption scandal.

Former Petrobras director Pedro Barusco alleged in a Brazilian court last June that several shipbuilding companies paid brides to win contracts with Sete Brasil.