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Petrobras pays 2014 bonus despite record loss, canceled dividend
May 28, 2015 / 4:02 AM / 3 years ago

Petrobras pays 2014 bonus despite record loss, canceled dividend

RIO DE JANEIRO, May 27 (Reuters) - Brazil’s state-run oil company, Petroleo Brasileiro SA, will pay employees 1.04 billion reais ($331 million) in bonuses for 2014 despite recording its largest-ever loss and rejecting investor dividends, a company union said on Wednesday.

The bonus, known as “a share in results”, is a third bigger than in 2013, when the company recorded a profit, and was approved at an annual shareholders meeting on Monday, the union, known by its Portuguese initials FUP, said in a statement.

“The shareholders of Petrobras tried hard, but this time did not receive dividends,” FUP said. “Disgusted, they even criticized the company for treating the workers differently.”

Officials of Petrobras, as the company is known, did not respond to requests for comment or confirm the authenticity of a Petrobras letter dated Wednesday and addressed to FUP outlining the payments. The letter was published on FUP’s website.

While Brazil’s government owns a majority of voting common shares, non-government investors, primarily holders of preferred shares, own most Petrobras stock.

Petrobras recorded a 23.6 billion real ($7.5 billion) profit in 2013. In 2014 it had a 21.6 billion real loss, the result of a $17 billion write-down of assets as a result of a massive price-fixing, bribery and political-kickback scandal, poor planning and execution and a decline in oil prices.

The union accused investors of “crying for their dividends.”

FUP, closely aligned with the Workers’ Party of Brazilian President Dilma Rousseff, herself chairwoman of Petrobras from 2003 to 2010, applauded the company’s 2014 performance, the only annual loss in at least two decades.

“The company’s positive 2014 results, along with the fabulous profits that have marked its history, are the direct result of the workers,” FUP said.

Some holders of preferred shares, the company’s most traded class of stock, have explored using a Brazilian law that requires, under some circumstances, the conversion of preferred shares into common stock if minimum dividends are not paid.

Petrobras, the world’s most indebted oil company, also faces U.S. and Brazilian lawsuits over the corruption scandal. Worth $290 billion in 2008, Petrobras is worth $55 billion today.

Petrobras, according to the unconfirmed FUP letter, agreed during contract talks to a higher 2014 bonus even if it lost money.

In Brazil, most employees automatically belong to a union. All Petrobras employees, including senior mangers, are eligible for bonuses. Petrobras did not say which employees are eligible for payments, which will be made by mid-June.

$1 = 3.14 Brazilian reais Editing by Alan Raybould

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