Brazil's Petrobras taps state banker as CEO; shares dive

Fri Feb 6, 2015 3:27pm EST
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By Jeferson Ribeiro and Luciana Otoni

BRASILIA (Reuters) - Brazil's 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 percent 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.

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 percent under his leadership.

Yet some investors voiced concerns Bendine's public-sector background and closeness to 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 Brazil's economy.

Bendine's appointment would mean the company will "remain largely bound to the government's needs," Bradesco BBI analysts led by Auro Rozenbaum 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 percent 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 economic boom last decade, Petrobras 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.

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   Continued...

The Petrobras logo is seen in Sao Paulo February 6, 2015. REUTERS/Paulo Whitaker