Petrobras Fuel Unit Sale Approval Was Split as Chairman Voted No

Petroleo Brasileiro SA’s board authorized the sale of a 25 stake in its fuel distribution business at a meeting in which the chairman voted against the proposal, signaling strategy divergences at the state-controlled producer.

Murilo Ferreira, who was appointed chairman in April, said Petrobras should first hire retail specialists to design a new business plan for Petrobras Distribuidora SA to improve its performance before divesting a stake, the producer said in a filing late Monday. The sale was also opposed by director Deyvid Bacelar on the grounds of unfavorable market conditions.

The Rio de Janeiro-based company is planning the sale as part of a cost-cutting and divestment strategy at a time when a collapse in oil prices undermines values and the resources of would-be buyers. Crude has lost more than half its value in the past year, with Brent falling below $50 a barrel.

The fuel unit, known as BR, is Latin America’s largest distributor and marketer of petroleum derivatives and biofuels. The company was valued by banks at between 30 billion reais ($8.6 billion) and 40 billion reais, a person with direct knowledge of the matter told Bloomberg earlier this month, asking not to be named because talks are private.

BR controls the largest gasoline station network in Brazil, with about 8,000 units and more than 1,000 convenience stores. It also sells fuels including diesel and ethanol. The business generated revenue of 121 billion reais last year, according to Petrobras’s annual earnings release.

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