RIO DE JANEIRO, April 24 (Reuters) - Brazil’s state-run oil company Petroleo Brasileiro SA avoided an imminent credit downgrade by publishing corruption-delayed financial statements but could still have its ratings cut in the next couple of years, Fitch Ratings said on Friday.
Petrobras released its third- and fourth-quarter earnings on Wednesday with a $17 billion write-down related to corruption, poor planning and falling oil prices. PricewaterhouseCoopers signed off on the audited results after months of scrutiny due to a police investigation of contract fixing and kickbacks.
Fitch said it removed Petrobras from “rating watch negative,” which signaled the possibility of an imminent rating downgrade, as the release of financial statements averted the breaching of bond covenants that could have triggered a major debt crisis for the world’s most leveraged oil company.
Yet Fitch assigned a negative outlook to Petrobras’ BBB-minus rating due to uncertainties about the company’s ability to cut its debt load and increase production “in the medium term.”
“Petrobras may face challenges to deleverage its capital structure organically, as the corruption scandal may result in delivery delays of production units,” the agency said in a statement.
A negative outlook signals a downgrade is possible within the next 12 to 18 months.
Petrobras has about $50 billion of outstanding debts, more than any other oil company. If it suffered a downgrade, it would lose its coveted investment-grade rating from Fitch.
Reporting by Walter Brandimarte; Editing by Ted Botha