Petrobras Opens Dividend Gusher

© Caio / Adobe Stock
© Caio / Adobe Stock

Petrobras has approved a record dividend payout of 87.8 billion reais ($17 billion), Brazil's state-run oil company said on Thursday, a move that will boost the government's coffers heading into a tense election.

In a securities filing, Petroleo Brasileiro SA, as the firm is formally known, said its board approved a dividend payout of 6.732 reais per ordinary and preferential share.

A first installment of 3.366 reais will be paid on Aug. 1 and the remainder is schedule to be paid on Sept. 20, the company said.

The move comes shortly after the Brazilian government, which is by far Petrobras' largest shareholder, sent a letter to the company and other state-run enterprises asking them to increase dividends to finance extra federal spending.

The government's opponents have alleged President Jair Bolsonaro is trying to boost his re-election changes by ramming through a number of short-term spending measures. He is currently down against leftist former President Luiz Inacio Lula da Silva by almost 20 percentage points in some polls, but other surveys indicate the race is much closer.

Both payments will be made before the first round vote, scheduled for Oct. 2.

($1 = 5.17 reais)

(Reuters - Reporting by Peter Frontini and Gram Slattery; Editing by Chris Reese and Marguerita Choy)

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