Petrobras confirms the sale of the Nitrogenated Fertilizers Unit (UFN3), in Mato Grosso do Sul 

Based on the announcement by the Minister of Agriculture, Livestock and Supply Tereza Cristina, the G1MS disclosed that Petrobras' nitrogen fertilizer unit (UFN 3), in the city of Três Lagoas, in Mato Grosso do Sul, was sold to the Russian company Acron.

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Last Friday (04/02), while work packages worth R$ 70 million were being launched for macro drainage and paving in the city in the east of Mato Grosso do Sul, information regarding the sale was disclosed: “We have just received the news that Petrobras concluded the sale of UFN3 to Acron and we are already advancing with the complement of understandings with Governor Reinaldo Azambuja”, said the minister.

The governor had previously said that the transaction for the sale of Petrobras' fertilizer industry was at an advanced stage. “This enterprise is extremely important for Mato Grosso do Sul, both for the recovery of the municipality's economy and for the self-sufficiency that the factory will be able to bring in fertilizers, given that our State is highly dependent on this input”, stressed Reinaldo Azambuja.

In a note to the G1, Petrobras confirmed the sale of its fertilizer industry in Mato Grosso do Sul: “Petrobras clarifies that the signing of the sale contract still depends on Petrobras' governance, after due government approvals. Petrobras reinforces its commitment to the broad transparency of its divestment projects and portfolio management and informs that the subsequent stages of the project will be disclosed in accordance with the company's Divestment System”.

About the fertilizer unit in Mato Grosso do Sul

In 2011, construction of the fertilizer factory began, however, they were stopped at the end of 2014, when Petrobras broke the agreement with the consortium that had won the bid to carry out the work, justifying default on the contract.

On February 11, 2017, Petrobras published that UFN3 and Araucária Nitrogenados SA (Ansa), in Paraná, were being offered for sale. The action was part of the state-owned company's development strategy and exit from fertilizer production in Brazil. In May 2018, after more than a year, Petrobras declared in a market statement that negotiations exclusively with the Russian company Acron would start within 90 days.

With the sale of the Mato Grosso do Sul unit underway, in June of the same year, the Minister of the Federal Supreme Court (STF) Ricardo Lewandowski, through an injunction, prohibited the government from carrying out the privatization of state-owned companies without prior authorization from Congress. .

In June 2019, the plenary of the STF chose to maintain the minister's decision on state-owned companies, however, it authorized the sale of subsidiaries, the subdivisions of the "parent companies", without the need for approval from the Legislative Power.

Soon after, Petrobras informed the market that it would resume the process of selling the fertilizer factory in Mato Grosso do Sul and also Ansa. "In this way, Petrobras is resuming the competitive process for the sale of these units", said the company, adding that "the operation is aligned with the optimization of the portfolio and the improvement of the company's capital allocation".

Initially, Petrobras put UFN3 up for sale more than 4 years ago, in 2017, on the grounds that it was no longer interested in remaining in the fertilizer segment. The group from Russia showed that it wanted to buy the factory, but soon reversed the decision, due to the obstacle to the supply of natural gas, which would be imported from Bolivia. At the moment, the company is once again finalizing the negotiation of this strategic asset in Mato Grosso do Sul.