April 9, 2019 / 1:00 PM / in 14 days

Brazil's Petrobras sets new rules for Liquigas deal, hoping to lure more bidders

FILE PHOTO: The logo of Brazil's state-run Petrobras oil company is pictured outside its headquarters in Rio de Janeiro, Brazil, December 17, 2015. REUTERS/Ricardo Moraes/File Photo

SAO PAULO (Reuters) - Brazilian oil company Petroleo Brasileiro SA released new rules for companies that intend to bid for its liquefied petroleum gas (LPG) subsidiary Liquigas Distribuidora, according to a filing on Tuesday.

Hoping to increase the number of companies bidding, Petrobras, as the state-run oil company is known, reduced the amount of revenue a rival can have compared to Liquigas sales, when in a consortium.

Two weeks ago, Petrobras said that rivals with more than 10 percent of market share in the Brazilian LPG distribution market cannot have a stake in the consortium that is higher than 40 percent of Liquigas’ revenue.

But according to new rules included in the documents filed on Tuesday, rivals may not have a stake in the consortium higher than 30 percent of Liquigas revenue, in an attempt to lure more participants to any potential consortium.

Restrictions for rivals are aimed at keeping antitrust authorities from blocking a deal, which happened in Petrobras’ first attempt to sell Liquigas in 2017.

Banco Santander Brasil SA has been hired to manage the sale. Potential buyers may contact Santander by April 19 to formalize its interest.

Reporting by Carolina Mandl; Editing by Jeffrey Benkoe

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