By Jeffrey T. Lewis
SÃO PAULO–Petróleo Brasileiro’s preferred shares faced a significant decline of 4.2% following the announcement of proposed changes to its bylaws by the state-controlled oil company, commonly known as Petrobras.
As a result of these changes, the shares reached 36.26 reais, equivalent to $7.24, and experienced a remarkable increase of 54% since the end of last year until the close of Friday. However, Brazil’s benchmark Ibovespa stocks index observed a slight decrease of 0.3% in mid-morning trading.
On Monday, Petrobras declared that its board has approved a proposal to modify its regulations pertaining to appointments for top positions within the company, alongside other amendments to its statutes. It is crucial to note that any changes proposed by the company must be approved by its shareholders.
Investors are expressing their unease with this proposal due to concerns regarding the potential for increased government interference in Petrobras’ operations. Bruno Komura, an analyst at Ouro Preto Investimentos, states that although the company’s pricing policy is unlikely to be affected, if approved, this proposal could result in alterations to the investment policy which may have long-term implications on profitability.