Petroleo Brasileiro S.A. - Petrobras (PBR)

[Wildbilly]

Petrobras plans to address results delay, graft allegations
| Reuters

Petrobras plans to address results delay, graft allegations
BY JEB BLOUNT
RIO DE JANEIRO Mon Nov 17, 2014 1:00am EST

Nov 17 (Reuters) - Brazil's embattled state-run oil company Petroleo Brasileiro SA will address on Monday its failure to release its audited third-quarter financial results due to a widening corruption scandal that has caused its shares to fall

The company will speak with investors and analysts and then meet with reporters starting at 11 a.m. (1300 GMT). On Thursday, the company announced it would delay earnings, which under Brazilian regulatory deadlines had to be released before the weekend.

Petrobras also said it hired private law firms to investigate allegations of money laundering.

On Friday, Brazilian federal police arrested a former top executive of Petrobras and senior leaders of powerful Brazilian construction and engineering companies as part of what they call "Operation Car Wash," a sweeping probe into money-laundering, bribery and campaign-finance-related graft.

Petrobras' preferred shares, the company's most-traded class of stock, fell 3 percent on Friday and are down 18 percent this year.

The scandal has also rocked President Dilma Rousseff's recently reelected government since prosecutors say millions of dollars of misappropriated money was funneled to her Workers' Party and other politicians.

Rousseff was the chairwoman of the Petrobras board of directors for seven years through 2010, when much of the alleged corruption took place. While she has denied any role in the wrongdoing and is not facing charges, the scandal could further weaken her government at a time when it is also facing a slowing economy and falling investor confidence.

Analysts and traders warn that potential corruption-related write-downs could lead to Petrobras being stripped of its investment-grade credit rating.

Investors are also concerned that the world's most-indebted major oil company risks a technical default on about $12 billion dollars in bonds if it doesn't report audited earnings by the end of the year.

The corruption scandal is the latest in a string of set-backs for Petrobras. It has since seen its market value fall by more than $200 billion, or about three-quarters, since 2008.

Investors have discounted its prospects after hundreds of billions of dollars spent on expansion failed to deliver promised oil and gas output.

Rousseff, who won reelection on Oct. 26, has pledged a thorough investigation and said on Sunday that the case could help change Brazil's culture of corruption. (Reporting by Jeb Blount, Editing by Brian Winter)

http://www.reuters.com/article/2014/11/17/brazil-petrobras-corruption-idUSL2N0T60IA20141117?type=companyNews&feedType=RSS&feedName=companyNews



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