19 de julio de 2016 / 20:52 / en un año

Petrobras inclined to redo fuel unit stake sale -source

SAO PAULO, July 19 (Reuters) - Brazil’s state-controlled Petróleo Brasileiro SA is inclined to restart the process of selling part of BR Distribuidora SA, a source with direct knowledge of the matter said, as a recent bidding round put a low price tag on the fuel distribution unit.

The source, asking for anonymity as talks are underway, said preliminary board and management discussions were converging toward selling control of BR Distribuidora to garner a higher valuation. An initial plan to sell a minority stake was behind the disappointing bids, the source said.

To kickstart the process, Petrobras must tell the three firms that placed second-round bids last month that the structure of the deal will change, the source said. The three bidders were global energy and commodity trading company Vitol BV and private-equity firms GP Investments Ltd and Advent International Corp, the source said.

The 30 firms that participated in a first-round bid could be invited to join the reworked stake sale process, the source said.

Petrobras said in a Monday securities filing that the structure of the BR Distribuidora stake sale will be decided this month. Neither the board nor management of Petrobras have decided yet whether to share or surrender control of the subsidiary, the filing added.

The media office of Rio de Janeiro-based Petrobras, which fully owns BR Distribuidora, declined further comment.

Chief Executive Officer Pedro Parente, who took office in June, wants to sell assets and cut debt without depriving Petrobras of units that generate cash or are core to the business. Reuters reported in March that Parente’s predecessors favored selling control of BR Distribuidora as interest in a minority stake faltered.

The discussions will define which model for the deal would bring about the highest price for BR Distribuidora and maximize profits and dividends for Petrobras, the source said.

A control-sharing mechanism in which Petrobras would cede voting control of BR Distribuidora has been widely used in the past by state firms, such as Banco do Brasil SA.

According to the source, the violent divergence in valuations led the board and Parente’s team to rethink the plan. Petrobras is seeking a valuation for BR Distribuidora of between 30 billion and 40 billion reais, the source added.

The company had 118 billion reais ($36 billion) in revenue last year and owns Brazil’s No. 1 gasoline station network.

In the June process, bids valued the company between 10 billion reais and 15 billion reais, the source noted.

Preferred shares of Petrobras, the company’s most widely traded class of stock, gained 1.9 percent to 11.77 reais, while common shares added 1.1 percent to 13.81 reais. Both stocks are up 76 percent and 61 percent this year, respectively.

STRUGGLE

The disposal of a stake in BR Distribuidora is part of a $14.4 billion target for asset sales at Petrobras, which is struggling with $130 billion in debt, the largest debt of any global oil company.

Potential bidders have remained wary of gasoline price caps and fallout from a massive corruption probe. Flaws in corporate governance exposed by a probe into Petrobras derailed an initial public offering of BR Distribuidora last year, bankers have told Reuters.

GP Investments and Advent did not comment for this story. Calls to a London-based press representative for Vitol were not answered.

According to UBS Securities analysts, a full sale of BR Distribuidora could deprive Petrobras of about $900 million in EBITDA, or earnings before interest, tax, depreciation and amortization, a year.

$1 = 3.2730 Brazilian reais Editing by Guillermo Parra-Bernal and David Gregorio

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