FT
Investors are venting their anger at Petrobras after Brazil's state-controlled oil company failed to calculate how much has been stolen in a vast corruption scandal that has shaken confidence in the world's second-largest emerging market.
Samantha Pearson reports that the company decided to publish its unaudited financial statements just after 4am in Brazil on Wednesday, originally due in November, to avoid breaking some of its debt covenants.
However, in a blow to investors, it said it was "impracticable to measure in a correct, complete and definite manner" its losses from an alleged bribery and kickback scheme at the company - believed to be the largest of its kind in Brazilian history.
Analysts had widely expected Petrobras to book a writedown of up to $20bn in what would have been a vital first step to regain credibility in the market and the trust of its auditors PwC, who have refused to sign off its accounts as police investigate the allegations.
"They release an unaudited financial statement in the dead of night, which no one trusts, and they leave out the corruption!", said one Brazilian on Twitter, calling for the impeachment of Brazilian President Dilma Rousseff over the scandal.
Others were appalled by a surprise R$2.7bn writedown on two of the company's 'Premium' refineries in the northeast of Brazil, which Petrobras said on Wednesday that it had decided to halt last week.
"Impeachment for administrative improbity!," said one shareholder in an emailed note, quoting previous statements from Ms Rousseff about the importance of the two refineries
About forty executives from Brazil's largest construction firms and former Petrobras directors have been arrested during the past few months over the scandal.
They are accused of conspiring to inflate the value of Petrobras contracts by up to 3 per cent for everything from refineries to ships in order to pay bribes and funnel cash to politicians, mainly from the ruling Workers' Party (PT) and its allies.
Without audited results, Petrobras may struggle to raise new capital and risks triggering a technical default for violating the terms of some of its existing debt, according to analysts and lawyers.
Earlier this month, some creditors agreed to accept unaudited third-quarter results instead as long as they were released by the end of this week.
However, credit ratings analysts say the Brazilian government may still have to provide the company with emergency funding - a move that would not only strip Petrobras of its investment-grade rating but also endanger Brazil's own coveted investment-grade status.
With over $135bn in total debt as of the end of September, Petrobras ranks as the world's most indebted oil producer.
On Wednesday Petrobras said it was taking measures to ensure it would not have to "visit the debt markets in 2015".
The scandal comes at a particularly delicate moment for Brazil's economy as President Dilma Rousseff struggles to win back investors' trust with a series of market-friendly measures and prevent another technical recession this year.
It also comes as Petrobras faces large operational challenges from the plummeting global oil price. According to the unaudited results, Petrobras's net income slumped 38 per cent to R$3.09bn in the third quarter from R$4.96bn in the previous three months as a result of the refinery writedowns.
