UPDATE 1-Petrobras hires Citigroup, others for unit IPO, sources say

viernes 17 de julio de 2015 17:25 GYT

(Recasts to add Reuters sources throughout)

SAO PAULO, July 17 (Reuters) - State-controlled Petróleo Brasileiro SA hired a group of five banks to handle the initial public offering of its fuel distribution business, two sources with knowledge of the plans said on Friday.

The investment-banking units of Citigroup Inc, Banco Bradesco SA, Itaú Unibanco Holding SA, Banco do Brasil SA and Grupo BTG Pactual SA were hired to handle the IPO of BR Distribuidora SA, as the unit is known, said the sources, who requested anonymity as the plan remains private.

Petrobras, as the oil producer is known, and the banks declined to comment.

According to the first source, Petrobras could offer at least 25 percent of BR Distribuidora, which controls Brazil's largest gasoline, ethanol and diesel station network, in an offering. Proceeds would go to Petrobras and not to BR Distribuidora, in a transaction usually known as a secondary offering, the same source added.

Another investment bank, preferably global, could be hired for the BR Distribuidora IPO, the first source noted. BR Distribuidora would be listed in the Novo Mercado, a section of the São Paulo Stock Exchange with the strictest corporate governance rules.

Petrobras is increasingly relying on cost reductions, asset sales and decreasing capital spending as a way to keep debt sustainable in the face of a corruption investigation. Petrobras has hired Itaú to manage the sale of fuel stations outside Brazil, sources told Reuters recently.

BR Distribuidora, which had 121 billion reais ($38 billion) in revenue last year, was recently valued at about $10 billion by UBS Securities analysts. The hirings were first reported by the newswire service of O Estado de S. Paulo newspaper.

($1 = 3.1891 Brazilian reais) (Reporting by Guillermo Parra-Bernal and Aluísio Alves; Additional reporting by Paula Laier in São Paulo; Editing by Lisa Shumaker)