Petrobras pockets billions from service station sale

Petrobras pockets billions from service station sale

Equity Capital Markets Debenture Debt Corporate & Sovereign Strategy Economy & Policy Energy Gas Brazil

Brazil's Petrobras said it could raise as much as BRL9.63bn ($2.56bn) from the sale of shares in its fuel distribution unit BR Distribuidora and reduce its stake to as low as 37.5%.

The state-owned energy company has sold 30% of BR for for BRL8.56bn, pricing 350m shares at BRL24.50, and it has given the underwriters 30 days to increase the offer by 43.7m shares to meet surplus demand. JPMorgan led the share sale with Citi, Bank of America, Credit Suisse, Itaú BBA and Santander as bookrunners.

Petrobras owned 71.3% of BR before the sale. It listed the service station business on the B3 stock exchange in São Paulo in December 2017, unloading a 27.9% stake for BRL5.02bn, or BR15.00 per share. Shares in BR rose 1.19% after the follow-on offering to close at BRL26.32 on Wednesday.

Petrobras said late last year that it plans to earn $26.9bn from assets sales through 2023 as it raises money to lower debt and fund a $105bn investment program. The company has since sold the TAG natural gas pipeline for $.6bn and asked bidders to present binding offers for its liquefied petroleum gas (LPG) subsidiary Liquigás Distribuidora, among other ongoing deals.

The Brazilian government has moved to offload state-owned assets under President Jair Bolsonaro. Just last week, the government and BB Seguros, the insurance division of the government-owned lender Banco do Brasil, sold their stakes in the reinsurance company IRB Brasil Re for BRL7.4bn, after the federal savings bank Caixa Econômica Federal sold its share for BRL2.52bn in February.

Petrobras also announced that its board has approved the sale of at least BRL3bn in debentures to raise money for exploration and productions investments. The company added that it could increase the offer to a total of BRL4.8bn to meet demand.

The debentures will be divided into three series. The first series will mature in 2029, while the second series will come due in 2034 and the third in 2026, Petrobras said in a securities filing.

Petrobras carried out a three-part debenture deal for BRL3.6bn in February this year, pricing BRL898m in seven-year notes at 4.046% above the IPCA consumer price index and BRL1.69bn in 10-year notes at 4.2186% over the IPCA. It also sold BRL1.01bn in seven-year notes at 106.25% of the DI interbank lending rate.


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