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Will A $1 Billion Capital Raise Solve Weatherford's 'Petrobras Problem'?

Weatherford is desert thirsty for $1B in capital to help solve its "Petrobras problem".

34% of its revenue is derived from North America, yet North America only generates 1% of EBITDA.

It has to service $7.8B in dollar-denominated debt with depreciating currencies from international markets - similar to Petrobras.

Once Weatherford's dilemma becomes widely known, S&P will downgrade Weatherford just like it downgraded Petrobras.

Desert thirsty camels. Source:

A few weeks ago Weatherford International (NYSE:WFT) announced a $1 billion capital raise to acquire Halliburton's (NYSE:HAL) divested assets. It promptly canceled the offering due to poor pricing. In another surprise move, last week management announced a restructuring that would involve laying off 40% of its global work force. The Financial Times bought management's story of needing capital to expand. However, I believe management had an ulterior motive. My recent

on Twitter (NYSE:TWTR) may have solved the riddle:

Commenter: When Schlumberger (NYSE:SLB) sneezes Weatherford catches cold. Angola represents 25% of Weatherford's cash balance ... $124 million in balance sheet cash is denominated in Kwanza which weakened 11% in Q2 and...