Petrobras should receive US$2.2 billion from sale of remaining 37.5% of former subsidiary

RIO DE JANEIRO, BRAZIL – Brazilian oil company Petrobras will receive about R$11.356 billion (US$2.2 billion) for 37.5% of its shares in BR Distribuidora, a former subsidiary whose control it sold in 2019 as part of its ambitious divestment plan.

The price of the papers of Brazil’s largest distributor put up for sale by Petrobras was defined on Wednesday, June 330, based on the price at which it closed on the São Paulo stock exchange and on the offers made by those interested in the shares, which exceeded R$30 billion (US$6 billion).

Thus, the demand for the shares almost tripled the shares offered.

With a defined price of about R$26 (about US$5.20) per share, Petrobras will receive about R$11.356 billion (US$2.271 billion) for the 436.8 million common shares of the fuel distributor that it put up for sale.

After the definition of the price, Petrobras will begin to deliver the shares next Friday to the institutional investors that demanded them, a process that will have to be concluded by July 5, according to the prospectus for the public offering of shares.

The sale of the remaining shares of BR Distribuidora was authorized last August by the Board of Directors of Petrobras, a company controlled by the State but with shares traded on the São Paulo, New York, and Madrid stock exchanges. Still, the company was waiting for the most appropriate moment in the market to announce the offer.

The former Petrobras subsidiary, founded in 1971, is Brazil’s largest distributor, with around 7,700 fuel stations in all the country’s states, and the market leader in fuel distribution, with a 27% share.

In addition to its gigantic network of service stations, the distributor has 85 fuel storage bases, 13 lubricant depots, and 99 airport refueling stations.

After a successful auction in 2019, in which it sold a 33.75% stake in BR Distribuidora for R$9.633 billion (US$1.9 billion at the current exchange rate), Petrobras was left with a minority stake of 37.5% of the company’s equity.

The privatization process of BR Distribuidora began in 2017 when Petrobras made an initial offering of shares in the distributor in which it sold 30% of its stake for R$5 billion (about US$1 billion).

According to the oil company, the sale of the remaining BR Distribuidora shares is part of its divestment plan. It aims to reduce debt, improve its financial profile, and focus operations on the most profitable assets, mainly hydrocarbon exploitation.

The divestment plan also foresees the sale of eight of the company’s refineries for this year, responsible for half of the country’s refining capacity.