“Petrobras Lost $2.1 Billion to Graft”
Bloomberg Businessweek, April 22, 2015
“Brazil’s national oil company said a graft scandal cost it 6.2 billion reais ($2.1 billion) following a five-month debate that cost the chief executive her job, destabilized politics and shut off its access to bond markets. Reporting the corruption-related charge in its first audited financial results since August, Rio de Janeiro-based Petrobras posted a net loss of 21.6 billion reais for 2014, dragged down by an impairment of 44.6 billion reais. Total debt rose to 351 billion reais at the end of last year, it said. Ensnared by the ever-widening graft investigation dubbed Carwash, Petrobras has been all but shut out of bond markets and had its credit rating cut to junk by Moody’s Investors Service on Feb. 24. The scandal — a decade of alleged kickbacks, bribes and inflated construction contracts — is playing out as crude trades near six-year lows. President Dilma Rousseff, whose popularity is at an all-time low, is struggling to contain the damage at the driller she oversaw and championed. … A combination of missed production targets, mounting debt and gasoline subsidies eroded confidence in the biggest producer in deep waters with the market value tumbling by about $250 billion since peaking at $310 billion in 2008.”
Quickie analysis: A good account of the fall of the house of Petrobras.