Brazil's Petrobras Says Its Pension Fund Has $6.8B Shortfall
RIO DE JANEIRO, June 23 (Reuters) - Brazil's state-led oil company Petrobras said on Thursday its pension fund has 22.6 billion reais ($6.8 billion) in unfunded liabilities, a new financial burden for what is already one of world's most indebted firms.
The shortfall at the country's second-largest pension fund is the latest setback to Petrobras' efforts to preserve cash needed to pay nearly $130 billion in debt. It also comes at a time when Petrobras revenue has plunged due to falling oil prices and investor confidence has been shattered by a massive corruption scandal.
The company, formally known as Petroleo Brasileiro SA , said that under Brazilian law the amount it and the fund's beneficiaries must immediately plan to cover is 16.1 billion reais ($4.8 billion).
The law makes Petrobras responsible for half of the adjusted shortfall and beneficiaries must cover the rest through higher retirement contributions, it said.
The fund, Petros, has more than 75,000 beneficiaries.
Petrobras said contributions needed to cover the shortfall can be spread out for up to 18 years starting in 2017.
Seeking to reduce debt, the company has cut its investment program, once the world's biggest, by more than half, threatening future revenue by limiting development of some of the world's largest oil discoveries. Attempts to raise cash and pay debt by selling about $14 billion of assets have also faltered due to the corruption scandal.
The Petros liabilities, based on an audit, are as of Dec. 31, 2015.
(Reporting by Stephen Eisenhammer and Jeb Blount; Editing by Sandra Maler and Edwina Gibbs)
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