The employee pension fund of Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), called Petros experienced over 6 billion reais or $1.9 billion of loss in 2014, according to Bloomberg. The deficit was 2.4 billion reais in the year before and the declining Brazilian shares is the reason attributed for the same. According to Bloomberg, this could affect the balance sheet of Petroleo Brasileiro Petrobras when Petros will hold it responsible for some of the loss.
Petroleo Brasileiro Petrobras to allocate more funds to the employee pension fund?
If internal rules are to be followed, the company will have to assign more funds in Petros, in case it continues with the loss story in third straight year as well. The employees also might have to allocate these funds. By the 2013 end, Petros had in its scheme the 158,000 participants. After the economists speculated and gave indication regarding the first financial meltdown since 2009 in Brazil, the stock index of the company dropped down by 2.9% in 2013.
Petros: The Investment Driver of Brazil
With the 2013 value of assets under management at 72 billion reais or $23 billion, Petros is said to be the key investment driver of the country. This includes the telephone companies, hydroelectric plants and oil companies as well.
Petros, BNDES (the State Development Bank) as well as GP Investimentos Ltd (the private equity company), were in the top list of biggest shareholders of the oil services provider, LUPATECH SA (OTCMKTS:LUPAY). Lupatech dwindled and defaulted in 2013. Petros is also the shareholder in other companies like Telemar Participacoes SA, Itausa – Investimentos Itau SA and JBS S.A. (OTCMKTS:JBSAF).
Fixed-income investments and poor performing stocks: The Reason of Loss
According to Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), the reason for the loss in 2013 is the poor performing stocks as well as fixed income investments. Petros said that keeping this aside, the pension fund had reported the profitability of 308% in the past decade. The integral target during this time was 241%.