HOUSTON/SAO PAULO, June 22 (Reuters) - Plans by Brazil’s Petrobras to sell its stake in ethanol and sugar producer Guarani SA have hit a snag as the state-run oil company has not been offered enough money for the asset, two sources with direct knowledge of the matter said.
Petrobras, which is struggling with a corruption scandal and stagnant output, is scrambling to sell around $3 billion in assets this year and $13.7 billion by the end of 2016.
The firm, formally known as Petroleo Brasileiro SA, wants far more for its current 42.9-percent stake than the approximately $200 million that its partner in Guarani, French agricultural commodity company Tereos, is willing to pay, the sources said.
A sale was first discussed at Petrobras headquarters in April, said the sources, who declined to be identified as they were not authorized to speak with media.
Petrobras declined to comment, while the Brazil head of Tereos said he was not aware that Petrobras planned to quit the partnership.
Petrobras, whose $130 billion of debt is bigger than any other oil company, has been hit hard by plunging oil prices that have left it struggling to get the prices it would like for assets.
“The timing is terrible,” said Julio Maria Borges, director at Job Economia, a consulting firm specialized in sugar and ethanol in Brazil.
“But if Petrobras is willing to take a loss, it will sell.”
Tereos already controls Guarani and has the right of first refusal on any offer. Any other bidders would only get a minority stake in a company trying to rebuild in a Brazilian sugarcane-based ethanol industry devastated by years of Petrobras subsidies for domestic gasoline.
Meanwhile, sugar in New York is trading at its lowest levels in six years. Brazilian sugarcane mills typically produce both ethanol and sugarcane, adjusting the amounts based on prices.
In its latest financial statements, Petrobras valued its Guarani investment at 1.25 billion reais ($407 million), and it still owes 250 million reais under the 1.6 billion-real 2010 accord where it agreed to buy up to 45.7 percent and inject new investment into Guarani over five years.
Tereos controls Guarani through a roughly 65-percent stake in Tereos Internacional SA, a Brazilian company listed on the Sao Paulo stock exchange.
In an interview with Reuters on Sunday, Tereos Brazil head Jacyr Costa said the company was happy with its relationship with Petrobras.
“If they want to leave, of course it will be discussed,” he said.
Asked if Tereos would be willing to buy back the stake, he said: “we are not in the market to buy or to sell mills at the moment”.
Costa said Petrobras could sell to a third party but that any such sale would have to meet conditions of a Tereos-Petrobras shareholders agreement.
Guarani’s assets account for seven of nine ethanol mills in which Petrobras owns stakes. (Additional reporting by Jeb Blount in Rio de Janeiro; Editing by Joseph Radford)