Petrobras Said Near Record Pipeline Sale to Brookfield-Led GroupBy , , and
Signing of the deal expected to conclude in September
Unit estimated to be valued at $5.5 billion to $6 billion
Petroleo Brasileiro SA is in the final stages of selling a natural gas distribution network to a group led by Brookfield Asset Management Inc., and could sell more than a previously planned 81 percent in what would be its largest-ever asset deal, people with direct knowledge of the process said.
Petrobras, as the Rio de Janeiro-based company is known, may agree on the sale of its Nova Transportadora do Sudeste SA gas pipelines and storage unit before the end of September, said the people, who asked not to be named because the negotiations aren’t public. The deal is estimated at $5.5 billion to $6 billion, the people said.
Singapore’s sovereign wealth fund GIC Pte, China Investment Corp. and Greenwich, Connecticut-based private equity firm First Reserve Corp. are also part of the group of buyers. Petrobras declined to comment on the deal in an e-mailed response. Brookfield declined to comment.
At the center of Brazil’s biggest corruption scandal and struggling to recover billions invested in unprofitable refineries, Petrobras set a $15.1 billion asset sale target for the two years through 2016 to reduce the heftiest debt load in oil the industry. After selling a mere $700 million of assets in 2015, Petrobras has speed up negotiations since Pedro Parente took over as Chief Executive Officer in June.
Petrobras will continue to sell assets in the coming years as part of an effort to halve its debt in three years, Parente said Monday at a conference in Stavanger, Norway.
The company has raised almost $4.6 billion by selling assets in Argentina, Chile and Brazil. The July sale of the giant Carcara offshore field to Statoil ASA for $2.5 billion was one of the largest ever by Petrobras.
"Petrobras is desperately trying to spin off assets as it faces a mountain of debt due in 2017, 2018 and 2019," Thomas Olney, an analyst with consultancy group FGE, said.
Petrobras has also announced plans to sell liquefied natural gas terminals, onshore fields and petrochemical assets. The company no longer plans to sell fuel unit BR Distribuidora this year, Anelise Lara, an executive manager at Petrobras, told reporters July 22. Asset sales are a major part of goals to reduce leverage, Chief Financial Officer Ivan Monteiro told reporters on Aug. 11.
— With assistance by Rakteem Katakey