Biting the Bullet to Restore Market Confidence
After much delay, the release of Petrobras’ audited 4Q 2014 results proved to be a muted and anti-climatic affair though it was very, very expensive. There was relief that the booked losses, and specifically the write down attributed to an on-going corruption scandal, were finally quantified and out in the open.
The numbers themselves were eye-wateringly high – a Brl 50.8 billion ($16.8 billion) write-down, with 12 percent of that directly attributed to bribery and kick backs linked to a number of political parties, including most prominently the president’s own Worker’s Party (PT). With investors and the public in the dark about the multi-year costs associated with the corruption scandal, the eventual Brl 6.2 billion identified as being the direct result of the kick-backs, if not exactly pleasant surprise, really was one that could have been a lot worse.…