Aberdeen Leads Investors Into Petrobras Board

(Corrects name of Hermes Fund Managers in second paragraph of story published April 30. To set a daily alert for Corporate Brazil: SALT BZCORP) Petroleo Brasileiro SA (PBR) is being pushed by minority shareholders led by Aberdeen Asset Management Plc (ADN) to focus more on profit than job creation after the state- run producer’s earnings slumped to an eight-year low. Enlarge image Petrobras is the worst-performing major oil company in the past two years after Russia’s Gazprom OAO as aging wells dragged down annual oil output for the first time since 2004 and fuel subsidies erode profit. Photographer: Dado Galdieri/Bloomberg Sponsored Links American Express—Savings A High Yield Savings Account With 0.85% APY—Learn Mor... AmericanExpress.com/Pe... Refinance Now 2.53% FIXED No Cost & No Fee Loan. No SSN rqd. Easy Process! (2.5... Mortgage.lendgo.com Office VoIP Phone Systems Link multiple offices with one phone system and one b... www.ringcentral.com/of... Buy a link Mauro Cunha, head of Brazil’s capital markets association, was elected yesterday as the minority investors’ representative on the 10-member board. Nominated by a group of 16 that includes Hermes Fund Managers Ltd, Cunha replaces Josue Gomes da Silva, who was elected with votes from state-run banks and pensions, giving the fund managers a greater board-room voice after a similar push led by BlackRock Inc. (BLK) failed last year. Petrobras is the worst-performing major oil company in the past two years after Russia’s Gazprom OAO (GAZP) as aging wells dragged down annual oil output for the first time since 2004 and fuel subsidies erode profit. The stock has fallen 24 percent since the Rio de Janeiro-based company lured investors to a $70 billion share sale in September 2010 on promises of boosting output 9.4 percent a year through 2014 by bringing deep-water fields into production. “It’s a good day for the Brazilian market, it shows investors are increasingly willing to cooperate,” Cunha said in an interview after the vote. “The whole point of there being a board is to have discussions, so every board member is important, that’s why it’s a great responsibility.” ‘More Comfort’ The BNDES state development bank and three state-run pension funds, which hold more than 10 percent of the company’s voting shares, defeated Cunha’s candidacy last year. Hermes and other investors complained to Petrobras and the country’s securities regulator, known as CVM, which published a resolution indicating the government-run institutions shouldn’t vote for minority representatives.

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