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Petrobras jumps on report government is weighing plan to sell stock





By Vinícius Andrade and Martha Beck /Bloomberg

Petroleumworld 10 25 2021

Petroleo Brasileiro SA, Brazil’s state-controlled oil company, gained amid signs the government is seeking a way to unload part of its holdings in the state-owned oil producer.

Preferred shares of Petrobras gained as much as 7.8% in Sao Paulo Monday after CNN Brasil said President Jair Bolsonaro’s administration is studying a bill to eventually sell some stock.

The idea is to propose a change in the company’s shareholding structure, allowing the state to lose its status as majority shareholder through equity offerings, while keeping some vetoing rights through a golden share, according to the report.

The model used by the government for privatizing utility giant Eletrobras sale would make sense if it decided to sell Petrobras shares, according to two people with direct knowledge of the matter. A concrete plan for the oil giant has never been discussed at length by the economic team, they added, asking not to be named because discussions are private. A potential bill would need to clear the Brazilian Congress.

Petrobras didn’t immediately respond to a request for comment.

Bolsonaro said earlier this month he wanted to privatize the company, without elaborating how the process might happen. Despite appointing Joaquim Silve e Luna, a former general, to run Petrobras, Bolsonaro’s government has left the company to be managed independently.

The news is positive since “it raises a discussion of a potential privatization,” Credit Suisse Group AG analyst Regis Cardoso wrote in a note. Still, the reported format of the government retaining the CEO appointment and veto power isn’t good for minority shareholders, according to Cardoso.

Petrobras had already traded higher Monday following an increase in gasoline and diesel prices. Bolsonaro, who has vowed not to interfere with the company’s fuel-pricing policy, has been increasingly vocal about privatizing Petrobras at a time he has been looking to deflect pressure from truckers to subsidize increasingly expensive motor fuels.

Petrobras is scheduled to report its third-quarter earnings on Thursday.


By Vinícius Andrade and Martha Beck from Bloomberg
10 25 2021



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