This Brazilian Oil Giant is Running Out of Time to Pay Back $24 Billion
And it could borrow more.
Brazilian oil giant Petroleo Brasileiro SA is in trouble—a reported $24 billion dollars worth of trouble. The struggling energy company needs to repay that amount to creditors within two years, and it’s unclear where it will get the funds.
Repayment seems unlikely in the short term. The price of oil has declined and the value of Brazil’s currency, the real, has weakened (most of the company’s debt is in dollars), as noted by the Wall Street Journal. Default also seems unlikely, reports Bloomberg, citing Standard & Poor’s and Moody’s conclusions that the semi-public company is simply too big to fail.
The most likely outcomes, according to Bloomberg, are government intervention or continued borrowing—or both. The state could relieve the company of fixed gas and diesel prices or else secure favorable terms on new loans, though neither is without risk. Raising gas prices would undoubtedly make the already tense social climate even worse, while more lending is ill-advised, given the already sky-high levels of corporate leverage, notes Bloomberg.
Continued borrowing from international creditors may be the more realistic option, particularly from China, which has already lent billions to the company.
Either way, the clock is ticking, and investors are sure to be getting antsy.
Fortune has contacted Petrobras for comment and will update this story if the company responds.
The Two Simple Words That Can Motivate Your Entire Team
They’re also a huge driver of creativity.
MPW Insider is an online community where the biggest names in business and beyond answer timely career and leadership questions. Today’s answer for: How do you encourage creative thinking within your organization? is written by Pascale Witz, executive vice president of Global Divisions at Sanofi.
Encouraging creativity in the workplace is an important challenge for many companies today. In the past, leaders were expected to rationalize, drive, and restructure their businesses to be successful. But now, they are expected to innovate, and promote engagement within their teams. Some people may consider “being creative” as an artistic thing, but I disagree. I think that we can all be creative—in my mind, “creativity” is just another word for entrepreneurship, innovation, or thinking out of the box.
Everyone has ideas of how to grow and improve business, but not everyone is given a chance to express their creativity, or may be too shy to share. We’re all busy with our day-to-day tasks, so it can be difficult to find time and space to think creatively. In fact, more and more companies are dedicating time and space to help further stimulate the minds of their employees. Throughout my career, I’ve always encouraged and challenged my team to express their creativity on a daily basis, by doing the following:
Inspire collaborationCreativity isn’t an individual pursuit—you have to give your team the opportunity to brainstorm, exchange ideas, and challenge each other. For example, trust your colleagues with a new project. Let them know that they have the freedom to figure out things on their own. Giving your employees the opportunity to express their creativity and defend their opinions will empower them and create business value.
Get a second opinionWhen you’re in the weeds of a project, it can be hard to take a broader, objective view of your work. So I always try to ask someone whose opinion I respect, for an alternative perspective. A fresh outlook can result in new ideas and help the project to move forward.
Say ‘thank you’A simple “thank you” or “congratulations” is a huge driver of creativity. When people feel that their initiatives are recognized, they are encouraged to bring forward even more proposals.
Make creativity a state of mindThese are very simple suggestions, but they can trigger a capacity for creativity that already exists in each of us. So the real question is: do you want to be creative? Or should I say: are you ready to surpass yourself, step out of your routine and progress? In the workplace, creativity – or entrepreneurship – is a state of mind.
Read all answers to the MPW Insider question: How do you encourage creative thinking within your organization?
Why taking a vacation is good for productivity by Debbie Messemer, managing partner at KPMG San Francisco.
Proof that the greatest ideas come from junior employees by Sophie Kelly, CEO of The Barbarian Group.
The real reason your ideas aren’t going anywhere by Carol Leaman, CEO of Axonify.
How your boss is killing your creativity at work by Jeff Diana, chief people officer at Atlassian.
Why creativity is absolutely crucial in the workplacebyBarbara Dyer, president and CEO of The Hitachi Foundation.
The one thing that’s blocking your creativity by Kerry Healey, president of Babson College.
How to reward good (and bad) ideas at work by Kathy Bloomgarden, CEO of Ruder Finn.
4 ways to stop worrying and embrace creative risks by Laura Pincus Hartman, professor of business ethics at Boston University.
Why you absolutely need creative employees by Nancy Brown, CEO of the American Heart Association.
Putting a Price on Human Eggs Makes No Sense
Egg donations in the United States can range anywhere between $5,000 and $50,000.
There’s something funny about the U.S. market for eggs. No, not the kind that spring from chickens and go into making pancakes, but those that come from humans and go into making babies. These eggs – tiny bundles of reproductive DNA – are produced by young women at the peak of their fertility. They are sold in the United States for anywhere between $5,000 and $50,000. And they exist in an Alice in Wonderland world of explicit denial, where prices are capped far below their open-market value and even the most expensive transactions are classified, universally, as “donations.”
The market for human eggs is a fairly recent development, prodded into existence by the explosive growth of in vitro fertilization (IVF) technologies in the 1990s and 2000s. Once it became possible — and then eventually commonplace — to create babies conceived outside the womb, it quickly also became possible to build those babies from other parties’ genes. By the mid-1990s, couples who suffered from male infertility, along with a growing numbers of lesbian couples and single women, were regularly purchasing sperm from commercial sperm banks – usually for between $200 and $300 a vial – and then combining these purchased gametes with the would-be mother’s eggs to conceive a child in vitro. Because IVF itself was becoming ever-more popular during these years, and because commercial sperm banks had been in place and relatively noncontroversial since the 1970s, combining purchased sperm and home-grown eggs never became particularly problematic.
Eggs, however, are different, both physiologically and commercially. To begin with, eggs are far more complicated to extract from a would-be donor, involving both a considerable amount of time and at least a small modicum of risk. Unlike their male counterparts, egg donors have to undergo both hormonal treatments (to boost their egg production) and surgery (to remove the eggs produced). They have to make repeated visits to a medical facility and suffer the mood swings and other side effects brought on by the hormones. In rare cases, the hormonal stimulation can cause ovarian damage and even – very infrequently – death. Not surprisingly, then, eggs are harder to come by in the open market and more expensive, starting at around $5,000 for an individual “harvest.”
What is surprising, though, and disconcerting, is that egg prices are also exceedingly variable, ranging easily up to $10,000 for the same kind of harvest, and occasionally reaching over $50,000. Even more surprising is that, in theory at least, these prices are capped. According to guidelines issued in 2000 by the American Society for Reproductive Medicine (ASRM), the reproductive wing of the American Medical Association, any compensation over $5,000 requires “justification,” and compensation over $10,000 is “beyond what is appropriate.” Legally, these guidelines have no standing, since the ASRM is a non-governmental body. In practice, though, they set a floor for egg compensation, particularly in those parts of the country where the fertility trade is quieter and less active, such as Alaska, New Hampshire, and Wyoming.
It is easy, in some respects, to see the wisdom, or at least the caution, behind this stance. No one wants to see vulnerable young women lured into selling their eggs to cover their car loans or college debt. No one wants to deal with the ugly reality that egg donation is not donation at all, but a high price paid for a piece of one’s body. And the ASRM doesn’t want the additional scrutiny of presiding over an industry where prices of $50,000 or $75,000 are commonplace.
And yet, as a recent class action suit alleges, the guidelines make absolutely no sense. In the United States, there is an active market for human eggs. Some people – generally younger, generally poorer, always women – are selling their eggs. Other people – generally older, generally wealthier, both men and women – are buying them. How can we say that such transactions are acceptable at $5,000, but become illicit at $10,000 or $25,000? There is simply no precedent for constraining any market in this fashion, nor any good reason for doing so.
If Americans believe that the sale of human eggs is abhorrent or dangerous, then we should either ban or restrict the practice. Such is the case in many other countries, where egg donation is either flat out illegal, or explicitly non-commercial. In Austria, for example, individuals can use only eggs or sperm donated by their own spouses for in vitro conceptions; in the United Kingdom, women can donate eggs, but can’t receive financial compensation in exchange. In the United States, by contrast, we permit the sale but cap the price. Which, to repeat, makes absolutely no sense.
There is no benefit to being squeamish here, or in proclaiming that paying a young woman $5,000 for her time, risk, and genetic material is somehow morally superior to paying her $25,000 or $40,000 for exactly the same thing. We have identified this transaction and allowed it. Now we are only squabbling over the price.
Debora L. Spar is the president of Barnard College, a liberal arts college for women affiliated with Columbia University.
The Surprising Way Entrepreneurs Can Recruit Better Talent
And build a stronger business
The Entrepreneur Insider network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “How important is it for startups to be in Silicon Valley?” is written by Stephen Lake, cofounder and CEO of Thalmic Labs.
Location matters. Globalization has clearly increased the ability for people to discover companies and job opportunities around the world, so setting roots in a location that is attractive to employees is important. My company found itshome in Waterloo, Canada, a community built on strong, entrepreneurial ideals that has allowed us to accelerate our success globally.
In the early days, we were often asked if we would be moving our company to Silicon Valley at some point in the future. Since my cofounders and I are graduates of the University of Waterloo, it felt natural to stay in the Waterloo region and acquire the talent coming out of the world-leading engineering school. Doing so has allowed us to raise more than $15 million from both Canadian and American investors (angel investors and venture capitalists), and we now attract talent from New Zealand, Italy, France, and all across North America. Key members of the senior leadership team were previously at BlackBerry BBRY 0.52% , which was born out of the Waterloo Region.
See also: Why it’s Time to Stop Blaming Investors
I admire the culture and energy of Silicon Valley, but I don’t believe that only one such location can exist. I think that there’s room for tech companies to push technology forward from all corners of the world. The vibe in Silicon Valley is admirable—it has this incredible culture and energy, attracting brilliant minds and venture capitalists to bring first-class technology to life. It’s an important part of tech culture and innovation, and while I’m excited to see the history that continues to be made in that amazing region, I’m also excited to see what we can learn from Silicon Valley and take to other parts of the world.
Alternative locations to Silicon Valley can be advantageous in some respects. The density of technology companies in such a small region has led to fierce competition for talented employees, driving up wages and increasing turnover. The density has also contributed to an increasing cost of living, with San Francisco recently surpassing New York as the most expensive city in America in which to rent a one-bedroom apartment. In short, while setting up shop in Silicon Valley offers many advantages, it has a challenging labor market and is one of the most expensive locations to operate a company.
The key to choosing where to set up shop for your startup is evaluating what you need for success, and finding a place that has an appropriate balance of tradeoffs that make sense for your company. For us, with a dependence on recruiting a team of highly skilled people from many different backgrounds (including hardware engineering, software, physics, and biology), the Waterloo region was a perfect fit. For you, that answer may be Silicon Valley, New York, Hong Kong, or perhaps even Florida.
Read all responses to the Entrepreneur Insider question: How important is it for startups to be in Silicon Valley?
Focusing on This Won’t Guarantee Success by Michael Maven, founder of Carter & Kingsley.
This City Could Be Better for Entrepreneurs Than Silicon Valley by Simon Berg, CEO of Ceros.
What Entrepreneurs Can Learn From Steve Jobs About Silicon Valley by Andrew Filev, founder and CEO of Wrike.
What This CEO Wants You to Know About Billion-Dollar Companies by Gavin Stewart, co-founder and CEO of NavaFit.
What Entrepreneurs Get Wrong About Funding by Linda Darragh, professor of entrepreneurial practice at Northwestern University.
The Key to Launching a Successful Startup by Josh Kaplan, director of properties and ventures at United Entertainment Group.
The Secret to Any Startup’s Success by William Vanderbloemen, founder and CEO of Vanderbloemen Search Group.
The One Myth Keeping Entrepreneurs From Success by Craig Morantz, CEO of Kira Talent.
The One Thing That Can Drag Your Company Down by Suneera Madhani, founder and CEO of Fattmerchant.
The One Thing More Important Than Being in Silicon Valleyby Mollie Spilman, chief revenue officer at Criteo.
The Biggest Downside of Moving to Silicon Valley by Allison Berliner, founder and CEO of Cataluv.
What Virgin Mobile’s Cofounder Wants You to Know About Silicon Valley by Amol Sarva, cofoundera of Virgin Mobile USA and developer of East of East.
The Silicon Valley Myth: Proof Your Startup Can Thrive Elsewhere by Fayez Mohamood, cofounder and CEO of Bluecore.
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