UPDATE 1-Petrobras rules out raising fresh capital for now -source

lunes 23 de noviembre de 2015 17:26 GYT
 

(Recast, adds Petrobras statement and source comments)

By Rodrigo Viga Gaier

RIO DE JANEIRO Nov 23 (Reuters) - Indebted state-run oil company Petroleo Brasileiro SA has ruled out bolstering its capital in the short term, a source with direct knowledge of the company's decision said on Monday.

In a statement released later on Monday, Petrobras, as the company is known, denied media reports of talks for the Treasury to transfer hybrid securities to the company, which would then book the securities as equity until it sold new stock.

Instead of raising capital, Petrobras has opted to look at other alternatives to improve its finances, said the source, who asked not to be named because he is not allowed to speak publicly.

Finance Minister Joaquim Levy said on Friday that he did not see an immediate need to inject fresh capital into Petrobras, saying it had adequate resources to sustain its operations.

Sources at the finance and planning ministries have told Reuters that there has been no discussions about a possible recapitalization, but acknowledged that the financial situation of the company is a cause of concern.

Petrobras is struggling with a deepening cash crunch caused by over-ambitious expansion spending and as a massive corruption scandal undermines its ability to refinance more than $130 billion of debt.

Hybrid notes combine elements of debt and equity securities. The government has used hybrid notes to pump money into state banks since 2009, allowing them to boost lending. (Reporting by Rodrigo Viga Gaier; Writing by Alonso Soto; Editing by Jonathan Oatis and Christian Plumb)