Despite making progress, Petrobras remains highly leveraged and likely to rely on external financing to refinance maturities, according to a report by rating agency Fitch Ratings.
“While Petrobras has reported very positive progress in its divestment plan, achieving its 2018 deleveraging targets can be challenging. Petrobras’ business plan aims to significantly reduce net debt to 2.5 times by 2018, from 4.7 Times in September 2016, “said senior director Lucas Aristizabal.
“This means a debt reduction of approximately $ 50 billion over the next two years, considering that current Ebitda and cash levels remain constant. Fitch views this aggressive deleveraging target as total divestment expectations add up 35 billion dollars for the period. ”
Fitch now expects Petrobras’ net debt to be around 3.5 times by the end of 2017, compared to 4.7 times as of September 30, 2016, assuming the company receives a significant portion of the disinvestment payments over of 2017, the agency said.
According to Fitch, in order for Petrobras to reach its deleveraging target of 2.5 times by the end of next year, it would have to receive an additional $ 20 billion of the divestments over the next 24 months and see Ebitda grow to around 30 billion dollars.
The new pricing policy announced in October last year is positive and will provide transparency and marginally increase the independence of the federal government to the point of ending the harmful long-term price control, Fitch said.