Petrobras Changes Bylaws To Sell Subsidiaries Without Shareholder Support

Petrobras Changes Bylaws in Assembly to Allow the State-Owned Company to Divest Refineries and Other Ventures Without Shareholder Approval.

Petrobras approved in an Extraordinary General Meeting (EGM) this Thursday, April 25, the change in its bylaws to allow, among other things, that the sale of control of subsidiaries can be approved directly by the Board of Directors, without needing shareholder approval. Although the Union, the controlling entity of the state-owned company, supported the change, about 25% of shareholders voted against the amendment to the bylaws.

The portion of the article that was amended by the shareholders provides for “bringing the competence for the approval of the transfer of control of the capital stock of wholly-owned subsidiaries to the Board of Directors”.

According to the publication, the government took another step toward the privatization of Petrobras and did not hide that the aim of the bylaws change is to speed up the process of asset sales of the state-owned company and reduce costs, given that convening a meeting costs around R$ 1 million.

“We are concerned about this change. At a time when efforts are being made to combat corruption, and the Supreme Federal Court has yet to decide on the sale of subsidiaries, we are afraid, as this matter will rest solely with the Board of Directors,” said Gerson Castellar, a representative of the Unique Federation of Oil Workers (FUP).

According to Marink Martins from MyVOL, Roberto Castello Branco is somewhat of a disciple of Murillo Ferreira and seeks to do with Petrobras exactly what was done with Vale – bringing it back to its “core business” of exploration and production. The power to divest assets without the need for shareholder meeting approvals is the missing catalyst for the transformational process to occur quickly and efficiently. It is possible that within three years, Petrobras will be a different company, focusing on pre-salt exploration in a manner analogous to what Vale did with its S11D project.

Carla Albano, the IR executive from Vale who worked closely with Roberto there and led the entire process of unifying Vale’s shares, has just joined the Petrobras IR team.

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