RIO DE JANEIRO: Shares of Brazil’s Petrobras plummeted five percent yesterday after the state-run oil firm delayed releasing its results amid a police investigation into corruption that has already ensnared a former senior executive.
Hours after the third-quarter earnings delay was announced late Thursday, police arrested 18 people suspected of involvement in a money laundering and bribery scheme centered on Petrobras. They raided Brazilian construction and engineering companies and seized potentially incriminating documents.
Investors are concerned the postponed publication of audited results for the third quarter puts the world’s most indebted oil company at risk of a technical default on tens of billions of dollars in bonds.
Analysts warned that the investigation and postponed earnings statement could result in the company being stripped of its investment grade by ratings agencies and prompt it to write down fixed assets.
Petrobras shares opened over an hour and a half after the rest of the Bovespa index, with the chief executive of the bourse, Edemir Pinto, saying at an event in Sao Paulo the delay was to ensure time for the market to digest the news.
Reuters
