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Brazil's Camargo Correa chairman quits amid asset sales

Stock Markets Aug 29, 2016 05:40PM ET
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© Reuters. A car drives into a tunnel constructed by Camargo Correa in Sao Paulo

SAO PAULO (Reuters) - Vítor Sarquis Hallack has stepped down as chairman of Camargo Correa SA [PMORRC.UL] as the investment holding company that controls the construction firm engulfed in the country's worst corruption scandal exits some business segments.

Camargo Correa, which was founded in 1939 as a civil construction company, said on Friday that Hallack will act as an adviser to the company, without elaborating. The statement did not say whether a replacement has been named.

According to O Estado de S. Paulo newspaper, which first reported the resignation on Friday, Camargo Correa is intensifying the search for a replacement for Hallack, who was in his post for about 10 years. The grandchildren of founder Sebastião Camargo occupy most of the board seats.

"The integration of the controlling family's third generation into the command of the holding company is the natural path and the result of long-term planning," Hallack said in a statement.

A spokesman for São Paulo-based Camargo Correa did not respond to repeated requests for comment.

Hallack's departure comes a year after Camargo Correa agreed to pay 800 million reais ($249 million) in damages from a corruption scheme at state companies. Its executives were the first to admit taking part in the scheme, which has also accelerated the downfall of President Dilma Rousseff's government.

Camargo Correa is Brazil's No. 2 construction company after Odebrecht SA [ODBES.UL], which is also involved in the so-called Car Wash scandal.

Under Hallack, Camargo Correa diversified from the core construction business further into cement, toll roads, fashion and electricity. A former Vale SA (SA:VALE5) senior executive, he could not immediately be reached for comment.

The youngest Camargos have pushed to sell some of the businesses if bids look attractive, Estado reported. In recent months, Camargo Correa has divested stakes in power holding company CPFL Energia SA (SA:CPFE3) and apparel maker Alpargatas SA (SA:ALPA4), raising almost 6 billion reais that might be used to repay debt.

($1 = 3.2297 Brazilian reais)

Brazil's Camargo Correa chairman quits amid asset sales

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