Petrobras Is Preparing to Sell 30% of BR Distribuidora

The Operation Would Be Through Issuing Shares on the São Paulo Stock Exchange, and Selling 30% Would Leave Petrobras With Only 40% of the Distributor

BR Distribuidora, the largest fuel station company in the country, is indeed set to be part of Petrobras’ divestments.
The oil company is in talks with banks and investors to sell 30% and thus retain 40%. The deal is expected to close to raise R$ 8 billion, given that the distributor is valued at R$ 27.3 billion and Petrobras’ stake is around R$ 20 billion based on Wednesday’s quote on B3 (São Paulo Stock Exchange).

There is even interest from the American fund BlackRock, identified as a potential financial investor in the operation, which would buy a share of the shares of BR Distribuidora that are offered.
According to market chatter, the announcement of the operation could be made in the coming weeks, and the deal could conclude this semester.

Petrobras is in discussions with the TCU and regulatory bodies aiming to define the sales model to be applied so as not to be surprised as in the case of the sale of TAG to Engie, as the courts suspended the process last year and the sale was only finalized after clearance by the STF. However, since BR is part of the stock market, there should be no issues with the operation.

Plans for More Sales

BR Distribuidora is a leader in fuel distribution in Brazil and had a 15.6% increase in net revenue over 2017.
The process of selling Petrobras’ stake in the company is part of a plan, since Pedro Parente’s management at Petrobras, to reduce the state-owned company’s debts. The government wants to raise about US$ 27 billion by 2022 through asset sales.

This year, Petrobras made its largest sale in history, TAG (pipeline in the North and Northeast region) was purchased by the French company Engie for US$ 8.6 billion (R$ 33 billion).
Another pipeline sold was NTS, from the Southeast region, to a consortium led by the Canadian manager Brookfield for US$ 4.2 billion (R$ 16 billion).

Three more pipelines are on Petrobras’ sales list. Known as Rota 1, Rota 2, and Rota 3, the three units have a combined length of about 1,000 kilometers extending from the pre-salt layer of the Santos Basin to the coast.

This set is smaller than TAG, but it is estimated that they are worth over US$ 3 billion combined, with two of them already operational and one still under construction. This operation would require the approval of Petrobras’ exploration partners, such as the French Total, Shell, Chinese CNPC, among others, as they have a stake in the gas production exploration.

Petrobras has also put Liquigás, its gas cylinder distributor, up for sale again, as the first attempt, the deal with the Ultra group, was not approved by CADE. The estimate is to conclude the sale in the third quarter of this year.
Another sale process is Petrobras’ stake in Braskem, a petrochemical company, which has Odebrecht as another significant shareholder in the deal and which may be finalized this semester with the Dutch LyondellBasell.

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