Petrobras holds a meeting this Thursday to decide on dividends and new board members | Policy

Dividends are a portion of the company’s profit that is distributed among shareholders. In the case of extraordinary ones, they are those paid in excess of the mandatory minimum. I.e, the company does not necessarily have to pay them.

And it was precisely the decision not to pay these extra dividends that generated controversy for the federal government during a vote at the beginning of March, and caused Petrobras shares to plummet 10% on the Brazilian stock exchange in just one day (read more below).

Petrobras board of directors decides to propose payment of extraordinary dividends

However, at the last meeting of the Board of Directors — held last Friday (19) — the board understood that the financing capacity of Petrobras projects increased from 65% to 85%, This is due to the increase in the price of a barrel of oil.

And because of this, the council did not oppose the board’s proposal to pay extraordinary dividends at 50%.

At last week’s meeting, the Council understood that factors such as the rise in oil prices increased the financing capacity of Petrobras’ projects.

R$14.2 billion in dividends were announced for the quarter, within the company’s minimum payment model, which generated controversy.

Petrobras’ board of directors even proposed the payment of half of the extraordinary dividends, but, at the time, government representatives on the Board of Directors voted against the proposal, which ended up being rejected.

• The Union has the majority of the council. Of the 11 advisors, the government has six of them.

The government’s strategy by not paying extraordinary payments was to strengthen the coffers. This amount cannot be used for investment, but remains in a contingency fund.

But, on the other hand, the market interprets the non-payment of extraordinary dividends as a lower attractiveness of the company’s shares, which caused share prices to plummet.

The day after the controversy involving these dividends, Petrobras shares fell by 10% on the Brazilian stock exchange in just one day.

The decision also caused the government to be criticized by the market and analysts for alleged interference in Petrobras.

On the Petrobras Board of Directors, the only person who was appointed by the government and did not vote for the retention of extraordinary dividends was the company’s president, Jean Paul Prates, who abstained — which was not very well received at Palácio do Planalto.

This was another chapter in the dispute between the Minister of Mines and Energy, Alexandre Silveira, and the president of Petrobras for influence in the company. The two have been at odds since the beginning of the government, behind the scenes and through public statements.

After that, according to government sources, Prates’ situation changed a lot. The Finance Minister is one of the few who defended Prates’ continued leadership of the state-owned company and his opinion tends to have a lot of weight in Lula’s decisions.

Haddad was uncomfortable with the turmoil in the company’s governance due to behind-the-scenes information about clashes between Minister Alexandre Silveira and Prates.

It was also Haddad who, behind the scenes, provided technical support for the payment of these extraordinary dividends to be approved.

Haddad realized that he will need more resources to maintain the hope of zero deficit in 2024.

The goal of the government’s economic team was compromised by the decision of the president of the Senate, Rodrigo Pacheco (PSD-MG), not to extend the section of a provisional measure that reburdened the payroll of around 3 thousand municipalities.

The government was counting on this reburdening of municipalities from April onwards to reinforce the federal cash flow by around R$10 billion.

With Pacheco’s decision, the payrolls of these municipalities are once again exempted and the Treasury needs to restore the accounts.

The election takes place this Thursday, during the general shareholders’ meeting, which will also deal with dividends.

The names nominated by the Union to form the council were:

• Pietro Abramo Sampaio Mendes: chairman of the Board of Directors
• Jean Paul Prattes: president of the company (position he already holds) and member of the Board of Directors
• Benjamin Alves Rabello Filho: member of the board
• Rafael Dubeux (current deputy executive secretary of the Ministry of Finance): member of the board
• Bruno Moretti: board member
• Ivanyra Maura de Medeiros: board member
• Renato Campos Galuppo
• Victor Saback