Petrobras Settles Graft Scandal Lawsuits

File image

By Reuters 2016-10-21 21:21:48

Brazil's state-run oil company Petrobras said on Friday its board approved settlements for four lawsuits sought by investors in New York federal court and it currently estimates a provision of $353 million to cover the costs.

Petrobras said the settlements include lawsuits led by Allianz SE's Pimco Total Return Fund, Dodge & Cox International Stock Fund, Janus Overseas Fund and Al Shams Investments.

Investors are suing Petrobras in New York accusing it of covering up a sweeping graft scheme and publishing misleading accounts. They believe the corruption and mismanagement helped destroy nearly $200 billion of shareholder value in Petrobras since 2008.

Petrobras said on Friday it would include a provision for costs related to the settlements in its third-quarter earnings report due to be released soon.

There are still 23 other individual lawsuits and a class-action lawsuit at the U.S. District Court for the Southern District of New York. The company did not say if it will seek settlements on those as well.

"At this moment, it is not possible for Petrobras to release a reliable estimate regarding the outcome of the class-action," said the company in a regulatory filing.

In a recent Reuters interview, Petrobras Chief Executive Officer Pedro Parente said the lawsuits in the United States would not overshadow the company's $74 billion, five-year plan to slash its crippling debt and refocus on its core business.

The oil company said Pimco is one of the largest holders of its bonds and that Dodge & Cox is one of its largest shareholders after the Brazilian government.

"These settlements, whose terms are confidential, do not constitute any recognition of responsibility by Petrobras, who will continue to defend itself in the remaining lawsuits," the Rio de Janeiro-based company said.