Petroleo Brasileiro SA’s employee pension fund, known as Petros, lost more than 6 billion reais ($1.9 billion) last year, according to a person with direct access to the fund’s preliminary results.
The deficit widened from 2.4 billion reais in 2013 partly because of Brazilian share declines, the person said, asking not to be identified before results are released publicly. Petrobras’s balance sheet could be affected when Petros charges it for part of its losses, the person said.
The pension fund can’t comment on financial results that haven’t been formally approved and has until July 31 to file to regulators, it said in an e-mailed response to Bloomberg.
Petros had 158,000 participants at the end of 2013, according to regulatory filings. Brazil’s benchmark stock index fell 2.9 percent last year as economists forecast the first economic contraction this year since 2009. Internal rules would force Petrobras or its employees to allocate more funds to Petros if it registers a third straight year of losses.
Founded in 1970, Petros is Brazil’s second biggest pension fund with more than 72 billion reais under management in 2013, including investments in oil and telecommunications companies and the Belo Monte hydroelectric dam in Brazil’s Amazon. Along with development bank BNDES, it was among the top shareholders in Lupatech SA, the oil services provider that defaulted in 2013. Petros has also owned shares on meatpacker JBS SA, Itausa -Investimentos Itau SA and Telemar Participacoes SA.
Results were negative in 2013 for the first time since 2008 and were affected by a poor performance in stocks and fixed-income investments, Petros said. The pension fund accumulated 308 percent profitability in the past 10 years, above an internal target of 241 percent, it said.
Petrobras said in December that two law firms it hired are expanding a probe into Petros after identifying possible linkages with an alleged corruption scheme known as Carwash.