MEXICO CITY (AP) — Mexican President Andres Manuel Lopez Obrador has announced a $3.9 billion bailout for the cash-strapped state-owned Pemex oil company.
Lopez Obrador also promised the company an additional $1.6 billion in revenue, bringing the rescue package to a total of $5.5 billion.
The extra revenue is expected to come from a crackdown on fuel theft by Lopez Obrador that reduced Pemex's sales.
The government package announced Friday includes assuming pension debt, injecting cash and cutting taxes. But the assistance plan is tiny in comparison to the $43.8 billion in debt the company has incurred since 2013.
The Fitch ratings agency has lowered the company's credit rating one step to "AA," with a negative outlook. It says Pemex is essentially insolvent.