Petrobras shares dive after Brazil taps state banker as next CEO
Public sector background has investors uneasy
BRASILIA • Brazil President Dilma Rousseff tapped a confidant from a state-run bank to be the next head of Petrobras on Friday, chilling investor hopes that a more independent new management team would steer the oil firm out of a huge corruption scandal.
The company’s shares slid more than 8% after news leaked that Aldemir Bendine, previously CEO of Banco do Brasil, would be Petrobras’ next chief executive. Petrobras’ board confirmed him in the job later on Friday.
Mr. Bendine oversaw a period of high profits at Banco do Brasil, where he furthered the government’s leftist economic agenda but also pleased private-sector shareholders, driving up the bank’s stock price by about 90% under his leadership.
Yet some investors voiced concerns Mr. Bendine’s publicsector background and closeness to Ms. Rousseff make him less likely to reverse Petrobras’ fading fortunes. Many investors blame the president’s interventionist policies for the company’s problems as well as a years-long slowdown in Bra- zil’s economy.
Mr. Bendine’s appointment would mean the company will “remain largely bound to the government’s needs,” Bradesco BBI analysts wrote in a client note. “We see no major managerial improvement compared to the previous administration.”
Shares in Petroleo Brasileiro SA, as the company is formally known, have tumbled about 60% since September as prosecutors alleged that billions of dollars in price-fixing and bribery plagued the company in recent years.
A symbol of Brazil’s long econom ic boom last decade, Petro- bras now typifies its fall from grace at a moment when the country is also facing possible water and energy rationing, high inflation and its second recession in as many years.
Ms. Rousseff also saddled Petrobras with heavy spending that has failed to meet ambitious production-growth targets, turning Petrobras into the world’s most-indebted and least-profitable major oil company.