- Brookfield, CIC, GIC and First Reserve said to be the buyers
- Deal could be only divestment from Petrobras in Brazil in 2016
Brazil’s troubled state-run oil company Petrobras is close to selling a 81 percent stake in a natural gas pipeline network in Brazil for nearly $6 billion to a consortium led by Brookfield Asset Management Inc, said three people with direct knowledge of the matter.
The Singapore sovereign-wealth fund GIC Pte, the Chinese sovereign-wealth fund China Investment Corp. and the Greenwich, Connecticut-based private equity firm First Reserve Corp are also part of the group of buyers, said two of the people, asking not to be identified because the discussions are private. The deal is expected to be signed as soon as next month, one of the people said.
Petrobras is trying to sell the network of gas pipelines, called Nova Transportadora do Sudeste SA, as it struggles to reduce the largest debt load in the oil industry amid crude prices that stand at half the levels seen just three years ago. The transaction, if closed, could be the only divestment in Brazil for the Rio de Janeiro-based firm this year, one of the people said, given the current pace of other deals.
BR Distribuidora and Transpetro, two subsidiaries the company is considering selling, are complex deals and are currently not moving fast enough to be concluded this year, one of the sources said.
Brookfield and First Reserve declined to comment on the deal. Petrobras, CIC and GIC didn’t immediately reply to requests for comment.
Petroleo Brasileiro SA, as the oil giant is formally known, said May 12 it had entered a 60 day period of exclusive talks with Brookfield, the largest alternative asset manager in Canada, for the sale of the gas pipelines, a period which could be extended by 30 more days.
Pedro Parente, who took over as the company’s chief executive officer this month, has vowed to reduce leverage at the world’s biggest deep-water oil producer and said he would focus on divesting assets outside of its core activities to focus investments on mega-projects in deep waters of the South Atlantic. The company has already sold about $2.1 billion in assets since last year, mainly from unloading its operations in Chile and Argentina -- part of a two-year, $15.1 billion asset sale program.
Petrobras wouldn’t cash in immediately the money as it would still need approval from regulatory bodies such as the oil regulator known as ANP, and the antitrust body Cade.