Petroleo Brasileiro (Petrobras) has agreed to pay $2.95bn to settle a class action lawsuit filed by its investors in the US.
The lawsuit was filed against the Brazilian state-controlled oil company in the United States District Court for the Southern District of New York.
Since March 2014, Brazil has been hit by the Car Wash investigation that probed bribes from contractors to executives of state-controlled firms and politicians in exchange of public projects.
Petrobras says that the agreement it has signed to settle the class action does not mean its admission of any wrongdoing or misconduct.
It added that the settlement is intended to resolve all pending and prospective claims by purchasers of its shares in the US and by purchasers of its shares that are listed for trading in the country.
Petrobras revealed that the settlement removes the risk of an unfavorable judgment which it says could have a material adverse impact on it and its financial situation. Additionally, the settlement would also end all the uncertainties, burdens and costs associated with the lawsuit, stated the Brazilian oil firm.
Petrobras, in a statement, said: “The agreement is in the company’s best interest and that of its shareholders, given the risks of a verdict advised by a jury, particularities of US procedure and securities laws, as well its assessment of the status of the class action and the nature of such litigation in the United States, where only approximately 0.3% of securities-related class actions proceed to trial.”
The agreement would need approval from the court to come into effect.
As per the proposed settlement, Petrobras will pay the amount in three installments of around $983m.
While the first installment will be paid inside 10 days of the court’s preliminary approval of the settlement, the second one will be paid within 10 days of final approval. The final installment will be paid six months after final approval or by 15 January 2019, whichever comes later.
Image: Petrobras headquarters in Rio de Janeiro, Brazil. Photo: courtesy of Eric and Christian/Wikipedia.org.