Analysts are skeptical of approval given to Petrobras to raise US$ 19 billion

03/05/2015 - 12h51

The Petrobras Board of Directors gave the green light in its most recent meeting, on Friday February 27th), for the company to raise funds in the market worth up to $ 19 billion (R$57 billion at current values) this year.

Nevertheless, analysts and bankers saw the figure with skepticism and do not believe that the company will obtain funds of that amount, revealed by the newspaper "O Estado de S. Paulo" on Wednesday (4).

	Ricardo Borges/Folhapress
	Policemen follow workers during demonstration aganist layoffs in front of Petrobras headquarters in Rio

Not even the person connected to the company who confirmed the information to the newspaper was optimistic. It was said to be a "permission" given by the board that may not materialize - a remark that was made at the meeting by the financial director of the State owned company, Ivan Monteiro.

A group of bank executives attended another meeting with members of Petrobras' finance department to deal with the possibility of raising money abroad. At the meeting it arouse that the market is closed for the company and it is not feasible to obtain funds this year, even after the publication of the audited balance sheet. The lack of this document prevents the company to borrow resources legally.

The recommendation was to carry out visits and make presentations to investors ("road shows", in the jargon of the market) only at the end of this year to test the acceptance of an operation - which would probably only emerge in 2016.

The reason for the disbelief is that investors fear purchasing titles from a company already heavily indebted. To do so, they would charge high interest rates and would ask for more guarantees.

Translated by CRISTIANE COSTA LIMA