Share prices for Brazilian state-owned oil giant Petrobras soared after it announced it had signed an agreement to obtain $3.5 billion in funding from the China Development Bank (CDB).
A huge kickbacks scandal which broke last year and implicated dozens of Brazilian politicians and executives has wiped tens of billions off Petrobras’ share price, with Brazil’s biggest state-owned corporation losing around two thirds of its value.
But Wednesday’s announcement sent it rocketing 6.2 percent in mid-afternoon trading in Sao Paulo, before closing up 4.83 percent on the day at 10.20 reais ($3.30).
The scandal has seen Petrobras’ unsecured debt rating drop into junk territory amid downward spiraling profits and a delayed external audit of last year’s results.
As a result the company, once considered Brazil’s most prestigious, is looking further afield to aid its cash flow as debts pile up.
On Monday, the firm announced its Argentine division had sold $101 million of onshore exploration and production concessions as part of a previously unveiled divestment plan to raise some $14 billion.
Petrobras said the CDB contract was signed in China during a visit by chief financial officer Ivan Monteiro, as part of a contract to be implemented through this year and next.
Petrobras, headquartered in Rio de Janeiro, said in a regulatory filing that it and the CDB “confirmed their intention to undertake further cooperation in the near future” as part of a strategy to “strengthen synergies between the economies of the two countries.”
Petrobras, which has also been hard-hit by falling oil prices, did not comment on any financial conditions attached to the deal or whether it was conditional on purchase of any Chinese equipment.