Brazil’s Rousseff Says She Won’t Rule Out Petrobras Rescue

Brazil’s Rousseff Says She Won’t Rule Out Petrobras Rescue
Sabrina Valle Arnaldo Galvao Anna Edgerton

January 15, 2016 —
Brazilian President Dilma Rousseff said her administration would be willing to evaluate government assistance to support state oil company Petroleo Brasileiro SA if conditions in the energy market continue to deteriorate.
“We won’t rule out that it could be necessary to evaluate,” Rousseff said Friday, responding to a reporter’s question about a possible capitalization of the company. “It’s not just the Brazilian government that won’t rule it out; no government would rule it out.”
As recently as December, Petrobras Chief Executive Aldemir Bendine and Chief Financial Officer Ivan Monteiro dismissed chances of a share sale, and said that the company has enough cash to meet expenses through mid-2017.
One option that was under consideration at the time, however, was the use of hybrid debt-equity securities to inject money into the company without immediately diluting shareholders, according to a Dec. 10 interview with Bendine, who added that the idea was in an early stage.
Petrobras is already trying to sell assets as it confronts an ongoing corruption scandal, the collapse of oil prices and a massive debt burden. Earlier this week, it cut spending plans and reduced estimates for its production growth.