Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), a Brazilian oil company in the eye of the storm has the need to focus more on its accounts than oil. The changed priority is explained from the appointment of Aldemir Bendine, a banking veteran, as the company’s new CEO instead of a face from oil background. The newly placed CEO is expected to clean the company’s records, which has been tarnished by a number of graft-related charges.
Auditor Renewal Process
Meanwhile, Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) will re-attempt to renew an auditing contract with PricewaterhouseCoopers, which has earlier refused to sign off the company’s financial results. To help address the condition, the government has scheduled a meeting on February 21; 2015 to discuss the proposal for auditor renewal, which seeks two-year contract from the auditing agency. It is to be noted that the auditor renewal proposal was submitted before Bendine took charge and hence, he will be entrusted with the responsibility to secure such contract. However, investors are wary that the state-run company under the dominance of President Dima Rousseff will give little freedom to Bendine to release real estimates of graft-related losses.
Realistic Numbers Not Expected
An accounting professor at Faculdade Santa Ursula, Reginaldo Goncalves said that President Rousseff will try to make things work in her favor or at least allow her to escape from public criticism. He expects little realistic numbers that Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)’s actual loss. The company has time little than four months or until June to publish its third-quarter results, which were supposed to be released in Novembers. If the company fails to show numbers before the deadline, then investors have full rights to declare it as a defaulter. That will force Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) to repay or negotiate on $54 billion in bonds.
Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), under tight watch, closed the previous session 2.75% higher at $6.72.