Petrobras – Market value below R$100 billion

Petrobras – Market value below R$100 billion

At the close of the stock market last night, the market value of Petrobras stood at R$99.68 billion.

Exactly 5 years ago today, Petrobras celebrated the world’s largest corporate mega capitalization ever of R$125 billion, Petrobras market value jumped to R$321 billion. To many, this was the beginning of the troubles for Petrobras. Since that date, the company has lost  69% of its market value or R$223 billion. In US dollars the market value loss has been even higher, 87% or U$ 163 billion to yesterday’s closing of U$24 billion.

In these last 5 years the liquid debt of the company has jumped 600%, from R$57 billion to R$400 billion (80% in USD), considered the largest corporate debt in the world. Couple this with the recent rating downgrade to junk status, the company will have a most difficult task to refinance its obligations and the creditors a harder task of finding a solution that will not kill the borrower.