BTG Pactual snaps up Petrobras Africa stake for $1.53 billion

RIO DE JANEIRO Fri Jun 14, 2013 9:51pm EDT

A Petrobras gas station is seen at Copacabana Beach in Rio de Janeiro September 24, 2010. REUTERS/Bruno Domingos

A Petrobras gas station is seen at Copacabana Beach in Rio de Janeiro September 24, 2010.

Credit: Reuters/Bruno Domingos

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RIO DE JANEIRO (Reuters) - Brazil's Banco BTG Pactual SA agreed to buy 50 percent of the African operations of Petroleo Brasileiro SA, the state-run oil giant said on Friday, expanding the high-flying investment bank's role as a backer of cash-squeezed Brazilian companies.

BTG Pactual (BBTG11.SA) agreed to pay $1.53 billion for 50 percent of Petrobras' (PETR4.SA) African unit, Petrobras Oil & Gas BV, which has offices in Angola, Benin, Gabon and Namibia and operations in Nigeria and Tanzania, the statement said.

Petrobras is trying to sell oil fields, exploration rights, refineries and other assets in the United States, Japan, Argentina, Peru and other countries to help finance a $237 billion, five-year investment plan, the world's largest corporate spending program.

It tried to sell the Nigerian assets alone for as much as $5 billion, Reuters reported on March 13.

"The operations represent an important step for Petrobras in its asset-sale program, allowing it to increase its activities in Africa and the sharing of investments needed to expand and develop its resources," a statement from Petrobras said.

BTG Pactual, founded and led by billionaire Andre Esteves, has taken advantage of sluggish world demand for commodities, soaring project development costs and rising corporate debt to buy assets or sell investment-banking services to cash-strapped and start-up resource companies.

In March BTG Pactual formed a partnership with Brazilian billionaire Eike Batista's troubled EBX Group, offering loans and helping its oil, mining, shipbuilding, port and electricity companies restructure.

The purchase of the Petrobras assets by Esteves' bank widens its investments in Africa, where it is seeking out mining and agricultural opportunities with B&A Mineração, founded by former Vale SA (VALE5.SA) Chief Executive Roger Agnelli.

B&A is counting on a recent drop in world metals and commodities prices to snap up farming, fertilizer, iron ore and other investment ventures in Brazil and Africa at discount prices.

FINANCING HURDLES

Petrobras finds its revenue squeezed by falling output, delays at new fields and government-ordered fuel subsidies. These problems have made it hard to finance the five-year investment plan aimed at developing giant new offshore resources near Rio de Janeiro.

Instead, Petrobras has been forced to increase debt above its self-imposed limits and try to sell assets.

While Petrobras had hoped to sell $14.8 billion of Brazilian and international assets over five years, a lack of interest and low offers forced it to cut its estimate in March by nearly 40 percent to $9 billion.

Pactual's purchase of 50 percent of the Nigerian assets plus a half-stake in offices and operations in five other African countries weighs in at less than a third of the $5 billion Petrobras goal for the Nigerian assets alone [ID:nL3N0CJA5I]

In December Reuters reported that Petrobras was having trouble selling an estimated $4 billion of assets in U.S.-waters in the Gulf of Mexico.

Rio de Janeiro-based Petrobras on May 24 rejected offers to buy 51 percent of its Argentine unit Petrobras Argentina SA (PER.BA), to Argentina's Oil Combustibles after trying to sell them since November.

It is also trying to leave Peru, where it has several natural gas blocks, Reuters reported June 7.

Petrobras said in a second statement on Friday that it is restructuring its petrochemical holdings by incorporating five petrochemical subsidiaries into the parent company.

The incorporation will not involve any sale of new stock in the companies, Petrobras said.

In a third statement, Petrobras said it was selling its 49-percent stake in Brasil PCH SA, a company that operates 13 small hydroelectric dams with 291 megawatts of capacity, to Cia Energética de Minas Gerais (CMIG4.SA) for 650 million reais ($303 million).

($1 = 2.1466 Brazilian reais)

(Reporting by Jeb Blount; Editing by Bernard Orr and Xavier Briand)

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