Petroleo Brasileiro SA raised about $2.3 billion through the sale of its remaining stake in Brazil’s largest fuel distributor in the biggest equity transaction in Latin America this year. Petrobras, as the company is known, fully exited Petrobras Distribuidora SA in an offering that priced at 26 reais ($5.23) a piece, according to company filings. The sale is part of a broader plan from the oil giant to exit non-core businesses, cut debt and focus on deep-water projects. The downsizing is also part of the government’s strategy to divest state-run assets. The privatization drive, one of the main promises of Economy Minister Paulo Guedes when taking office in 2019, has been on hold for most of the past year after the pandemic upended the economy. The government recently scored a victory after gaining congressional approval to sell utility giant Eletrobras, stoking investor optimism.
Petrobras started divesting from BR Distribuidora in 2017 during the company’s initial public offering. Two years later, it sold control of the firm in a public equity offering, raking in about $2.2 billion and ending government control over the biggest player in the industry. Further divestment brings a significant contribution to Petrobras’s asset-sale program, while also cementing BR Distribuidora’s independence. Analysts are mostly positive on Petrobras’s outlook after the oil company posted a profit and cut debt in the first-quarter results, boosting optimism for dividend payments under the company’s new direction. The preferred stock has 10 buy recommendations, three holds and one sell.