Petrobras rewrites rules for sale of fuel distribution unit BR Distribuidora
Pedro Parente, president of Petrobras, says the divestiture of Petrobras Distribuidora S.A. (BR Distribuidora), the fuels distribution and marketing unit of the state-owned company should happen in early 2017, after the company’s board approved restructuring the terms of the sale, following three offers that were rejected by the company.
Two of the three proposals sought operational control of BR Distribuidora, even though the terms specifically stated that Petrobras sought to sell a minority stake, Anelise Quintao Lara, Petrobras’ executive manager for acquisitions and divestments, said.
BR Distribuidora operates a network of 7,500 service stations across Brazil.
Given the lack of interest in a minority stake in the subsidiary, Lara said that the board was requested to revise the terms of the sale.
Petrobras said it would stop the current competitive bidding process and will start a new sales auction.
Binding offers are due to be received in November or December 2016, with the sale to be confirmed in the first quarter of 2017, depending on the regulatory approval required, according to Parente.
The new sales process would seek out a partner that would share control of BR Distribuidora via a joint venture that would split ownership of the company into ordinary and preferred shareholders. According to a securities filing, Petrobras now plans to keep no more than 49% of the voting capital of BR Distribuidora.
The sale would have to be approved by the government anti-trust agency known by its acronym Cade for Conselho Administrativo de Defesa Econômica.
“We see this model as the best way to get a good price for the company and maintain a share of profits. The model could lead to a future initial public offering of shares in the fuels unit,” said Lara.
The planned divestment is part of Petrobras’ plan to sell USD 15 billion of assets by the end of this year, to reduce its huge debt burden, which has reached almost USD 130 billion in the first quarter.
Other asset sales include the sale of natural gas pipeline operator Nova Transportadora do Sudeste (NTS), which operates about 2,500 kilometres of natural gas pipelines in the industrialized south and southeast regions of Brazil.
Petrobras recently extended negotiations to sell the subsidiary to Brookfield Asset Management for an additional 30 days to August 12. The sale could raise more than USD 5 billion for Petrobras.
In a separate regulatory filing, Petrobras also said that it had signed a sales and purchase agreement to sell all of Petrobras Chile Distribuicion to private-equity fund Southern Cross Group for USD 464 million. The deal was initially announced in May, although final terms were still under negotiations. Petrobras expects to complete the deal in three or four months.
Petrobras Chile Distribuicion operates 279 service stations, eight distribution terminals and a lubricant blending plant across Chile. The company also supplies jet fuel to 11 of Chile’s airports and holds stakes in two logistics companies, Petrobras said.
Last week, Petrobras announced the sale of one of its largest oil and gas prospects to Norway’s Statoil for USD 2.5 billion. The agreement will give Statoil ASA 66% ownership and operator status in a block that is home to Carcará, a prospect that Statoil estimates to contain 700 million to 1.3 billion barrels of oil and equivalent natural gas.
The deal is for the BM-S-8 offshore exploration license owned by Petrobras, which would give Statoil two-thirds of the oil and gas produced in Carcará, which should start production in the mid-2020s.
