Voting shares of Petroleo Brasileiro SA (PETR4), the most indebted publicly traded oil company, fell the most in a week amid concern a $237 billion spending plan will undermine dividend payments.
Voting shares of Petrobras, as the state-run producer is known, dropped 0.9 percent to 17.64 reais at the close of trading in Sao Paulo, the most since March 12. The shares are down 9.8 percent this year, compared with a 1.6 percent drop in non-voting shares and a 6.5 percent loss in the benchmark Bovespa index.
Petrobras maintained the size of its five-year investment plan, the oil industry’s biggest, to develop the world’s largest discoveries over the past decade and build new refineries, according a statement on March 15. The Rio de Janeiro-based company said Feb. 4 it would pay lower dividends on voting shares for an indefinite period to preserve cash.
“Dividends will probably continue to be low and this will have an impact on the voting shares,” Joao Brugger, who helps manage 220 million reais ($110 million) at Leme Investimentos Ltda. in Florianopolis, Brazil, said by phone. “In the short term, it’s difficult to raise money in the market.”
The world’s biggest oil producer in deep waters is struggling with the dual priorities of expanding production and keeping debt low enough to maintain its investment-grade rating. The five-year plan calls for $61.3 billion in borrowing to finance investments and service its debt.
Cash flow will total $164.7 billion over the period and an additional $9.9 billion will come from asset sales and financial restructuring, Petrobras said in the plan.
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