Lula Blasts Big Dividends Ahead of Meeting with Petrobras CEO

Monday, March 11, 2024

Brazil's president on Monday called for state-run oil company Petrobras to pay smaller dividends and invest more, in remarks recorded ahead of a meeting with the firm's chief executive, who held out hope of an extra dividend that was axed last week.

President Luiz Inacio Lula da Silva, in an interview with TV channel SBT that aired in part before a full evening broadcast, underscored his conviction that Petrobras should be a motor for economic growth and job creation over shareholder returns.

Petrobras shares, which dove nearly 11% on Friday after government-named board members voted against an extraordinary dividend, erased a meager recovery to fall about 1% after Lula's remarks were broadcast.

"Petrobras is not just a company that should think about shareholders who invest in it, Petrobras has to think about investment and think about the 200 million Brazilians who own this company," Lula said in the TV interview.

His sentiment clashed with comments from Petrobras CEO Jean Paul Prates to Reuters on Monday that Lula did not interfere with the company's dividend decision and that the board may still approve an extra dividend at an April shareholder meeting.

On Thursday, Prates presented a management proposal to the board for Petrobras to pay shareholders 50% of the potential extraordinary dividend under company bylaws, but government-appointed board members voted to withhold the money.

The move blindsided investors, who expected an extraordinary dividend of $3 billion or more in addition to a routine payout of 14.2 billion reais ($2.9 billion) announced on Thursday.

Prates was in a meeting with Lula on Monday to discuss the matter when SBT first shared parts of the president's remarks.

Before the meeting, Prates said he was not planning to leave his role over the issue.


(Reuters - Reporting by Rodrigo Viga; Additional reporting by Andre Romani; Writing by Fabio Teixeira; Editing by Brad Haynes, Susan Fenton and Bill Berkrot)

Categories: Offshore People

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