Petroleo Brasileiro Petrobras SA has planned sale of assets amounting to $3 billion, for this the company has decided to hire JP Morgan services. According to Reuters, Petroleo will put assets including drilling license and properties on sale this year.
Last year, during the month of March, the allegation was imposed on Petroleo Brasileiro Petrobras SA for overcharging construction companies cartels and giving the surplus to the workers party politician and to its past executives. This current scandal has caused the United State Securities and Exchange Commission and other legal authorities to start investigation. During the last year, the company’s stock has fallen 83%. The company has additional problems in raising cash from the global debt markets.
Since last June crude oil prices have fallen up to 50%, which has increased the stress on the oil giant to maintain sufficient liquidity need. According to Reuters, in order to structure the deal, oil service company is looking forward to attract more bidders. Unknown sources at Reuters also said that the bidders can be from Middle East as well.
Another unknown source from Reuters pointed out that a lot of meetings are expected to be held in the coming week to evaluate the opportunities of the deal.
On Tuesday, Petrobras faced another hinder; as Moody’s corporation revised the company’s rating and demoted it to a junk stock. This was due to the ongoing corruption scandal and weakening liquidity
Amongst the two major rating companies, Moody’s was the first company to reduce the oil company’s investment rating. Earlier in February Fitch has reduced the company credit rating from BBB to BBB-.Followed by that S&P has also cut Petrobras’ credit rating to its least grade. Earlier last week, JPMorgan Chase & Co Securities said the company will experience its first credit rating downgrade from Moody’s. Company has witnessed a biggest rating downgrade in 10 years as presently it is the most indebted energy firm in the world.
It is extremely important for Petrobras Brasileiro to issue its audited annual reports by April or else it will default and will be forced to make accelerated bond payments which it has issued.
Petroleo Brasileiro Petrobras SA stock is red by 0.49%, and was traded at 61.28 before the market closed on Friday February 27th, with 19.42 million shares changing hands in average 30-days. The oil giant company has a 52 week low of $52.97, and 52 week high of $63.49, with market capitalization of $228.47 billion and P/E ratio of 11.58.