Brazil’s state-run oil firm Petroleo Brasileiro SA will seek to reduce its leverage ratio to 2.5 from 5 currently before 2020, Chief Executive Officer Pedro Parente told newspaper O Estado de S. Paulo in an interview on Sunday.
Parente said the leverage target will be included in the business plan to be announced on Sept. 19. The plan will also have an operational target, Parente said.
The targets will help Petrobras, as the company is commonly known, turn the page on its severe crisis within five years, Parente was quoted as saying.
Petrobras has been at the center of Brazil’s biggest corruption scandal ever and saw its debt soar after previous governments kept fuel prices low to help control inflation.
“Debt can’t be 2.5 times bigger than our cash flow. We’ll work to reduce our indebtedness and raise revenues through a business-oriented policy for fuel prices,” Parente said.
A company’s leverage relates to how much debt it has on its balance sheet and is a measure of financial health. (Reporting by Silvio Cascione; Editing by Jeffrey Benkoe)