SBM Offshore Reaches Leniency Deal in Brazil

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July 18, 2016

File photo: SBM Offshore

By Elco van Groningen

(Bloomberg) — SBM Offshore NV, a Dutch oil-services provider, rose the most in nine months in Amsterdam trading after reaching a leniency deal with Brazilian authorities following a corruption investigation.

SBM climbed as much as 15 percent Monday, the biggest intraday gain since Sept. 28 and the most among companies on the Stoxx Europe 600 Oil & Gas Index.

The company is free to resume business with oil producer Petroleo Brasileiro SA after agreeing to a civil fine of $163 million and a cut in bonus payments on one of its vessels of about $112 million, the prosecutors’ office said July 15. SBM will take a first-half provision of $30 million related to the deal, Dutch newswire ANP reported.

SBM was accused of a “pay-to-play” scheme in which company representatives allegedly bribed Petrobras employees to be favored in oil-platform bids.

“As it is off the blacklist and the leniency agreement has been signed, SBM isnow in a position to actually win tenders, returning to full competition,” Andre Mulder, an analyst at Kepler Cheuvreux in Amsterdam, said in an e-mailed note. Kepler raised its rating on SBM shares to hold from reduce.

The stock traded up 13 percent at 11.58 euros as of 10:56 a.m. local time, paring its decline this year to 0.8 percent.

Bribery Probe

Brazil’s Comptroller-General’s Office, the government agency known as the CGU, opened a probe into SBM last year. The company could have been barred from signing further contracts with state-controlled companies such as Petrobras, one of SBM’s main clients, if it had failed to settle with the CGU.

SBM and Petrobras will resume a normal business relationship, SBM said in a statement.

The leniency agreement is “significantly more positive than the market was expecting,” analysts at Sanford C. Bernstein & Co. said in a note.

© 2016 Bloomberg L.P

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