Petrobras in Focus: CEO Dismissal and Extraordinary Dividend Payment Shake Up Brazilian Market

In Short:

On Thursday, the domestic market was rattled by news of the possible dismissal of Jean Paul Prates from the helm of the state-owned company. The company's shares immediately depreciated upon this disclosure, and the Ibovespa stock index also experienced a "forced" correction after surging more than 2,000 points at the opening of the spot market. It is noteworthy that the company carries significant weight on the Brazilian index, so fluctuations in its stock prices also have a considerable impact on the Ibovespa.

The drop in share value was short-lived because shortly after this news broke (still uncertain, as the company's CEO mentioned having a full agenda on Friday), it was announced that Brazilian ministers had reached an agreement for Petrobras to pay extraordinary dividends to investor shareholders. Consequently, the state-owned company's shares, which had dropped by 5% within an hour, rebounded to pre-news levels, propelling the Brazilian benchmark index to new highs during the session.

The distribution of approximately R$ 43.9 billion in extra dividends to the oil giant's shareholders was agreed upon by the ministers in a meeting at the Casa Civil, attended by some aides as well. The decision will be subject to approval by President Lula, but given the consensus among the ministers, it is expected that the payments will be released upon approval of the proposal at the company's shareholders' meeting, scheduled for April 19.