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Petrobras may incur $20 billion charge in delayed Q3 results

Staff writer |
Brazil's state-run oil company Petroleo Brasileiro SA (Petrobras) could take an impairment charge of about 52 billion Brazilian reais, or $20 billion, in its long-delayed financial results for the third quarter to write down the value of some of its assets, according to a Veja magazine.

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Veja's Mercados blog reported that the impairment is equal to about 42 percent of the market value of Petrobras, which has a market capitalization of $47 billion.

Petrobras is reportedly mired in a corruption scandal, with allegations of the company being involved in a political kickback scheme.

Petrobras' employees as well as some of the company's contractors have been accused by Brazilian police of inflating the value of projects for their own profit and then paying kickbacks to politicians, mostly from the ruling Workers' Party coalition.

The scandal led to an investigation by the U.S. Securities and Exchange Commission and also resulted in the company's auditor, PricewaterhouseCoopers, refusing to certify the company's accounts until Petrobras conducted its own inquiry.


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