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| Petrobras' headquarters in Rio de Janeiro |
But the capital boost to Petrobras is still incipient and lacks support in the cabinet even before taking shape. Direct aides to President Dilma Rousseff assured to Valor that the proposals have not yet been discussed among the higher ranks of government and see a potential capitalization as practically impossible. Little money wouldn’t help Petrobras at this moment, one source said, and the Treasury has no funds.
The hybrid instrument is a mechanism used several times by former minister Guido Mantega and former Treasury secretary Arno Augustin to strengthen the capital of federal banks Banco do Brasil and Caixa Econômica Federal when the government wanted to stimulate the economy by increasing credit availability.
Since the loan contract doesn’t appear as an expense that cuts into the government’s primary-surplus target, the capitalization is considered a fiscal maneuver. In traditional transactions, when the government increases its stake in the equity of state-run companies, the spending is booked as primary expenditure. The effect on fiscal statistics is captured in the gross debt of the public sector, because a capitalization through IHCD means the transfer of government securities of very long terms to the oil company.
A government bailout of Petrobras is expected since the company found closed doors to the international market. But market sources told Valor that a help in amounts compatible with Petrobras’s needs can put the sovereign rating at risk.
Holder of the second-largest gross debt of the Americas ($127.5 billion), only behind General Electric, Petrobras has been hurting from the strengthening of the dollar at a moment in which its revenues fall because of the drop in oil prices. Its financial expenses have grown proportionally, since 85% of its debt is denominated in dollars. In September the company’s net debt reached R$402 billion, up 24% from the previous quarter.
In January, $2.5 billion in bonds come due, part of $5.94 billion that must be paid in 2016. Altogether, the debt maturing next year is $12.19 billion. In 2018 other $22.72 billion come due.
The state-run company had R$11 billion in foreign-exchange losses, the main cause for its R$3.8 billion third-quarter loss. CFO Ivan Monteiro has been concentrating his effort on preserving cash as much as possible. Most of it is allocated abroad. Mr. Monteiro stressed last week that Petrobras began the year with $26 billion in cash and maintains $25.6 billion. Still, the market watches apprehensive the leverage “explode,” as one analyst put it recently.
(Daniel Rittner, in Brasília, and Cláudia Schüffner, in Rio, contributed to this story.)
By | Brasília
valor.com.br 11/20/15
Waldemar Jezler
