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Government Signals Positively Toward the Privatization of Petrobras Through Sale of Shares. Golden Share Would Be Kept.
President Jair Bolsonaro stated today (10/25) that the privatization of Petrobras through the sale of shares is on the government’s radar, although he considers the project to be difficult to implement.
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VIDEO- Bolsonaro Talks About Possible Privatization of Petrobras and Its Challenges
According to information released by CNN Brasil, the government is exploring ways to modify the company’s share system and, in the process, privatize it through the sale of shares.
Furthermore, according to the same report, the government intends to maintain the so-called Golden Share, holding the position of being the largest shareholder of the oil company.
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Additionally, there is a consensus among the economic team and congressional leaders about the feasibility of carrying out this privatization through a bill that would allow the sale of shares.
The plan would be to create a corporate structure in which no other shareholder could own more shares in the company than the Union.
The news caused the São Paulo Stock Exchange, which had been experiencing a series of drops due to discussions about the spending cap related to the adjustment of the government’s new social program, Auxílio Brasil, to rise.
The government and BNDES now hold 36.75% of Petrobras’s shares, including both common and preferred shares. In common shares, the government maintains control of Petrobras with 50.5% of the shares.
Understanding the Privatization of Petrobras Through the Sale of Shares
According to what has been reported by CNN Brasil, the government aims to dismantle the system of common and preferred shares, where common shares provide voting rights on the investor council and preferred shares have preference for receiving dividends from the company.
According to an agreement with the government team, just this change would already increase the share prices and enhance the company’s value.
The next step would be a bill that allows the government to retain only what is essential to have veto power and choose the president of Petrobras, while selling the remaining shares on the market. The initially proposed idea is for the government to keep only 10% of Petrobras’s shares and start selling its shares from those held by BNDES and BNDESPAR.
Market Reaction
The market received this news extremely positively. Petrobras’s preferred shares closed up 6.84% and common shares up 6.13%
Driven by this optimism, the São Paulo Stock Exchange’s trading session saw a 2.28% increase, closing at 108,714 points.
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