Petrobras CEO Maria das Graças Silva Foster. Image courtesy of Offshore Technology Conference/Youtube.

Brazil’s Petrobras will reportedly take a multi-billion loss tied to an ongoing corruption scandal in its delayed third quarter report after striking a deal with government creditors that will allow the company to avoid default.

The state owned company will likely determine the size of the writedown using the “present value of discounted future cash flows” rather than the “fair price” accounting method, a source close to the company told Reuters.

“The company wants to put this behind it as quickly as possible. It is determined to take all of the loss now as re-calculating past results is too complicated and figuring out the exact value of corruption and overcharging is almost impossible,” the unnamed source said.

Petrobras has not commented on the report.

The size of the writedown has not been disclosed.

Brazil’s national accounting agency said last month Petrobras may have overpaid by as much as $1.2 billion in transactions being investigated for possible kickbacks.

The results have been pushed back three times since November 3 after PricewaterhouseCooper refused to sign off on accounts tied to transport chief and politician Sergio Macahdo.

Former downstream head Paulo Roberto Costa has alleged that funds from state owned Petrobras were used for illegal political campaign financing, including campaigns run by Machado.

The company also won some breathing room Tuesday after reaching a debt accord with unnamed bilateral lenders.

The accord will allow the company to release its unaudited third quarter financials by the end of January and avoid having to declare default.

The lenders initially asked for the company to release audited statements.

Petrobras has faced mounting pressure from international lenders to disclose its third quarter results.

Earlier this month, New York-based Aurelius Capital Management threatened to declare a credit event against the company if it continued to delay its report.


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