Remember When Brazil’s Petrobras Was Supposed To Go Bankrupt?

A worker of Brazilian oil company Petrobras takes part in a protest against the privatization of any section of Petrobras, in front of the state-owned oil and natural gas company’s headquarters in Rio de Janeiro, Brazil, where directors and CEO Pedro Parente have their offices, on July 15, 2016. (Photo by YASUYOSHI CHIBA/AFP/Getty Images)

One year ago this month, the share price of Brazilian oil company Petrobras was trading around $3 and change. Dramatists assailed the company on social media, wondering how long before then-president Dilma Rousseff would take the company off the market or put it in bankruptcy protection. Twelve short months later and Petrobras is up…251.44%!

But recent moves by labor unions upset over privatization of assets could throw a wrench in the machine.

The company, seen by some as the “victim” of the country’s largest corporate corruption scandal ever, has been saved by stronger oil prices, a new policy that allows the company to back out of once-mandatory deep sea oil and gas bids, and its divestiture plan. The company is shedding assets, however slowly, and one of these days the math will work out in Petrobras’ favor. It will have its debt load under control. And it will be investment grade once again.

On Wednesday, Fitch Ratings said Petrobras’ liquidity position is “supported by robust cash and marketable securities, stable cash flow generation and the company’s proven track record of

access to debt capital markets.”

As of September 2016, Petrobras had $22.4 billion in cash and marketable securities, more than enough to cover its $11.4 billion in short term debt. The company’s liquidity is also supported by funds from operations of approximately $20.1 billion, which is expected to be used to cover capital…