January 12, 2019 / 5:53 PM / 2 months ago

Brazil judge temporarily allows Petrobras to continue divestment program

Brazil's state-run Petrobras oil company headquarters is pictured in Rio de Janeiro, Brazil December 5, 2018. REUTERS/Sergio Moraes

SAO PAULO (Reuters) - The chief justice of Brazil’s Supreme Court has restored a presidential decree regulating how state-controlled Petroleo Brasileiro SA (PETR4.SA) can carry out an ambitious divestment program meant to reduce the company’s significant debt.

Judge Dias Toffoli’s decision, signed on Friday, overturned an injunction issued by a colleague last month. Toffoli’s ruling should hold until Feb. 27, when the full Supreme Court will hear the case.

The December injunction, following a lawsuit filed by the opposition Workers Party, raised doubts about the ability of Petrobras, as the company is known, to carry out the divestments as planned.

Petrobras is planning asset sales of $26.9 billion over the next five years, according to a strategic outlook released late last year.

Reporting by Paula Arend Laier; Writing by Marcelo Rochabrun; Editing by Chizu Nomiyama

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