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Petrobras (NYSE:PBR) +2.6% in Tuesday’s trading after saying it agreed to pay 19.8B (~$3.5B) in back taxes to Brazil’s federal government to end several tax cases, equating to a 65% discount from the original amount the tax office said was owed by the company.
The agreement would close tax cases during 2008-13 related to funds Petrobras (PBR) had sent abroad to pay for services such as the chartering of vessels, the company said.
Petrobras (PBR) estimated the tax debt renegotiation will result in a ~11.9B reais ($2.19B) hit to its Q2 net income.
The settlement, approved by the state-controlled company’s board on Monday, is the first major decision under new CEO Magda Chambriard.
The tax payments also should help Brazil’s government to balance its budget as the administration of President Luiz Inacio Lula da Silva seeks new sources of revenue to meet its fiscal targets.
Separately, Petrobras (PBR) said it has selected a consortium led by PetroRio for talks over the sale of its Albacora and Albacora Leste offshore oil fields.
The value of PetroRio’s bids is not yet clear, but Petrobras (PBR) had said previously that the offers may exceed $4B for both fields.