New directions for the future of Petrobras! Bradesco BBI foresees growth scenario in the domestic market after conversations with opposition parties of the presidential election

After talking with advisors from opposition parties to the presidential election, Bradesco BBI is projecting a new future for Petrobras. The purchase of Vibra Energia and a merger with Eletrobras are some of the points raised.

In times of elections and in the midst of an increasingly unstable scenario regarding the future of Brazilian presidential management, the direction of Petrobras is also uncertain. Bradesco BBI bank analysts have great projections documents on the future transactions of the oil company in the domestic market. Among them is a possible merger with the recently privatized Eletrobras and the purchase of the company Vibra Energia, a likely scenario for one side of the electoral race.

Opposition of the presidential election race foresees the purchase of Vibra Energia and the merger of Petrobras with Eletrobras for the future of the state-owned company 

The Brazilian fuel and energy market is now witnessing a fight between the parties in the presidential race for the best future proposals for state-owned companies, including Petrobras. 

And, after a conversation with advisors from the electoral opposition who are running in the elections, analysts Vicente Falanga and Gustavo Sadka, who signed the Bradesco BBI report, brought up the proposals of one of the sides. 

They include the resumption of management of the company Vibra Energia, which will be bought by the state-owned company in a favorable scenario, and a possible merger with Eletrobras, which recently went through the privatization process. 

“In this scenario, we assume a leveraged buyout of all common shares in Eletrobras for US$34 billion, in accordance with poison pill rules, and investments in offshore wind farms for US$15 billion. We also undertook a leveraged buyout of Vibra for $6,8 billion under poison pill rules,” the experts commented. 

Although it looks like a good scenario for Petrobras' growth in the national fuel market, analysts see a scenario that is not favorable to the shareholders of the oil and natural gas company. 

This is because, according to surveys by Bradesco BBI, the state-owned company would need to go through leverage to buy Vibra Energia and Eletrobras, the company's net debt would grow to close to US$ 70 billion at the end of four years, leaving the current US$ 42 billion.

Election: Bradesco BBI still sees a favorable and resilient scenario for the state-owned company's shareholders throughout the next presidential term in Brazil 

Although they have analyzed a problem of possible transactions by the state-owned company in the domestic market in the future, analysts Vicente Falanga and Gustavo Sadka still see a resilient scenario for these businesses over the next 4 years. 

Before analyzing this scenario, which they call 3.0, specialists saw a projection of constant decline in the future of Petrobras, even assuming fuel prices below parity and the resumption of some refining projects.

In addition, Bradesco BBI analysts believe that there is a 50% chance of this scenario materializing under a new Brazilian government, which leads them to believe in a short-term correction in the shares to US$11 per ADR.

Another point highlighted for the future of the state-owned company in the national fuel market, in the scenario of the purchase of Vibra Energia and merger with Eletrobras, was the company's effort for the energy transition. 

They believe that these efforts are far from being competitive advantages for the company in the domestic energy sector, but maintain their recommendations for the purchase of shares in the company. 

This, because there is still a prosperous future of growth for Petrobras, it is only necessary that there is a government plan invested in making this happen.