Brazil’s state-run oil producer Petrobras agreed to pay $2.95 billion to settle U.S. class-action lawsuits over a massive corruption scandal that has damaged its market value.
The deal will end a three-year legal battle with investors in Petrobras’ American depositary receipts and bonds who claim they incurred large losses after Brazilian prosecutors exposed a wide-ranging money-laundering and kickback scheme involving the company in 2014.
The settlement, which needs to be approved by a U.S. judge, will reflect on the company’s fourth-quarter 2017 results and will be paid in three installments, the latest in early 2019, the Rio de Janeiro-based producer said in a statement on Wednesday.
Petroleo Brasileiro SA, as the oil producer is formally known, was at the heart of a Brazilian corruption probe dubbed Carwash that also spread to other industries and countries, implicating construction companies, banks, shipyards and leading politicians over the past couple of years. The company says it was a victim of fraud orchestrated by a handful of individuals.
“The agreement does not constitute any admission of wrongdoing or misconduct by Petrobras,” it said in the statement, adding that it was a “victim of the acts uncovered by Operation Carwash, as recognized by Brazilian authorities including the Brazilian Supreme Court.”
Petrobras expects to resolve all pending and prospective class-action lawsuits in the U.S. The settlement does not include compensation for investors who bought their securities in Brazil, where class actions are rare. The company says it will keep disputing other claims in court.
The company has settled more than a dozen individual cases brought against it in the U.S. District Court for the Southern District of New York and expects the remaining to join the current settlement.