Petrobras (PBR), the stressed-out Brazilian oil giant which is included in our Stressed Out index, just announced some measures to help it deal with its massive debt. This, coupled with a recovery in some oil stocks following a rise in the price of oil, has sent its U.S.-traded shares as much as 10% higher Thursday.
In a statement on its website, the company, one of the 20 in the Real Money Stressed Out index, announced restructuring measures that could save around 1.8 billion Brazilian reals ($440 million) per year and cut at least 30% of managerial posts in non-operational areas. Of the company's 7,500 management positions, 5,300 are in non-operational areas.
Among the measures: centralizing activities, merging various areas, setting new criteria for appointing executive managers and making managers formally responsible for decisions and results.
Petrobras is rated below investment grade by Moody's and Standard & Poor's, with a negative outlook. Its total debt stands at $127.5 billion, some 6.3x trailing 12-months earnings before interest, tax, amortization and depreciation (EBITDA).
The state-owned company has already cut its investment plans for 2015-2019 by 24% in an attempt to rein in its debt; its share price has collapsed more than 50% over one year as it has been engulfed into a corruption scandal that has hit the country's highest-ranked politicians.
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