Embraer close to deal with US, Brazil on corruption probe
New York: Embraer SA is close to completing agreements with US and Brazilian investigators to settle allegations of corruption that have hovered over the aircraft maker since 2011.
Final agreements —with the US justice department and securities and exchange commission and with Brazil’s federal public prosecutor and market regulator CVM—will have terms similar to those Embraer described in July, the company said in a statement. Those included possible fines, a deferred prosecution agreement and the imposition of an independent monitor to assess compliance.
Putting the probes behind Embraer would help wipe the slate clean for chief executive officer Paulo Cesar de Souza e Silva, who replaced Frederico Curado this year. The company set aside $200 million in provisions for the anticipated settlement in the second quarter, leading to a surprise loss.
Goldman Sachs Group Inc. upgraded Embraer shares to a buy on late Wednesday, before the company’s statement on the corruption probes. Analyst Noah Poponak cited potentially strong third-quarter results and more detail on cost-improvement plans.
Embraer’s American depositary receipts rose 3% to $17.68 at 9:54am in New York. Bloomberg