San Francisco: Scandal-wracked energy giant Petrobras has seen some small buds of hope springing up this week as its bond price has rallied.
Brazil’s state-controlled oil producer has endured months of negative publicity surrounding the alleged vast web of graft that saw huge bribes paid by potential suppliers and slipped to Petrobras executives and politicians, among others.
Prosecutors have said the scandal at Petrobras may have cost the company as much as $700 million.
The nation’s reputation and economy have been reeling as the revelations have piled on but the recent bond-price pickup of 7% over a week suggests some signs are good.
Notably, Brazilian media said on Wednesday that securities regulators had approved a methodology for the company to measure losses tied to the corruption investigations.
A board meeting is scheduled for Thursday. Investors have been awaiting the release of audited financial statements for 2014 but if the financial statements are not delivered by the end of April it would trigger a technical default on its bonds.
Many investors have sold the company’s bonds in recent months, fearing it wouldn’t be able to sort out its financial statements in time to avoid default. But now others seem to be jumping back on the Petrobras wagon, possibly feeling the imminence of default will concentrate minds at the company.
Another encouragement came from ratings agency Standard & Poor’s decision to hold off on reducing its credit rating, cutting only the outlook on the grade.
And there was also something of a boost in the political arena as the national government denied on Wednesday that it was looking to strike a “grand bargain” with Brazilian construction and engineering firms implicated in the kickback scandal.
Prosecutors say such leniency deals would hinder criminal investigations to punish the corrupt executives who allegedly paid billions of dollars in bribes siphoned off overpriced contracts.