Petrobras to pay out $8.5B in dividends but future uncertain

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Petrobras (NYSE:PBR) said Thursday it will distribute ~43.68B reais ($8.5B) in dividends in the company’s latest in a string of blockbuster payments that may come to an end following Luiz Inacio Lula da Silva’s return to power in January.

The state-run oil firm’s board approved a dividend payment of 3.35 reais, the equivalent of $0.66, per preference and ordinary share, which lifts the full-year total payout above last year’s record 101.4B reais.

Petrobras’ (PBR) near-term prospects are uncertain, as the state-run company will controlled by the leftist Workers’ Party after Lula defeated President Jair Bolsonaro in a runoff vote on Sunday.

Workers’ Party head Gleisi Hoffmann and other critics argue the huge payouts have led to underinvestment in the company’s core business.

Oil workers’ union FUP and Petrobras (PBR) minority shareholders’ association Anapetro said they would challenge the approval of new dividends and sue the company’s board in court.

The political risk is too high to hold Petrobras (PBR) shares, Ricardo Fernandez in an analysis posted recently on Seeking Alpha.

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