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Petrobras to Sell Majority Stake in Pipeline Unit to Brookfield
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Brazilian state-run energy giant Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) reported that it has finally reached an accord to sell a 90% stake in its natural gas pipeline and storage unit, Nova Transportadora do Sudeste. This subsidiary of Petrobras is responsible for operating 2,700 kilometers of pipelines in the south of the country.
The stake is being sold to Canadian investment fund, Brookfield Asset Management Inc. (BAM - Free Report) , for an undisclosed amount. However, sources with knowledge of the matter estimate the transaction value to be around $5.2 billion. Also, the sale still needs a nod from the company’s internal statutory body.
This deal, which is slated to close by the end of this month, is in line with the company’s plan to divest assets worth $15.1 billion by 2016 to reduce its debt. Under this strategy, Petrobras has already divested assets in Argentina, Chile and Brazil. In July, the company also sold its Carcara offshore field to Norway’s Statoil ASA for $2.5 billion, thereby making it one of the biggest sales in the company’s history. Petrobras will have to undertake asset sales worth $6 billion to reach its goal after the sale of Nova Transportadora.
Petrobras, with net debt of around $103.56 billion, is the most indebted energy company in the world. The company is undergoing a deep financial crisis due to low oil prices and the loss of goodwill owing to the discovery of massive corruption within its ranks.
Petrobras engages in the exploration, development, and production of crude oil, natural gas, and natural gas liquids. Additionally, the company sells crude oil and oil products produced at natural gas processing plants in domestic and foreign markets. It is also involved in the refining, logistics, transport, and trading of crude oil and oil products. Moreover, the firm exports ethanol and invests in petrochemical companies.
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Petrobras to Sell Majority Stake in Pipeline Unit to Brookfield
Brazilian state-run energy giant Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) reported that it has finally reached an accord to sell a 90% stake in its natural gas pipeline and storage unit, Nova Transportadora do Sudeste. This subsidiary of Petrobras is responsible for operating 2,700 kilometers of pipelines in the south of the country.
The stake is being sold to Canadian investment fund, Brookfield Asset Management Inc. (BAM - Free Report) , for an undisclosed amount. However, sources with knowledge of the matter estimate the transaction value to be around $5.2 billion. Also, the sale still needs a nod from the company’s internal statutory body.
This deal, which is slated to close by the end of this month, is in line with the company’s plan to divest assets worth $15.1 billion by 2016 to reduce its debt. Under this strategy, Petrobras has already divested assets in Argentina, Chile and Brazil. In July, the company also sold its Carcara offshore field to Norway’s Statoil ASA for $2.5 billion, thereby making it one of the biggest sales in the company’s history. Petrobras will have to undertake asset sales worth $6 billion to reach its goal after the sale of Nova Transportadora.
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Petrobras, with net debt of around $103.56 billion, is the most indebted energy company in the world. The company is undergoing a deep financial crisis due to low oil prices and the loss of goodwill owing to the discovery of massive corruption within its ranks.
Petrobras engages in the exploration, development, and production of crude oil, natural gas, and natural gas liquids. Additionally, the company sells crude oil and oil products produced at natural gas processing plants in domestic and foreign markets. It is also involved in the refining, logistics, transport, and trading of crude oil and oil products. Moreover, the firm exports ethanol and invests in petrochemical companies.
Petrobras currently carries a Zacks Rank #3 (Hold). A better-ranked player from the broader energy sector is NGL Energy Partners LP (NGL - Free Report) . It sports a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
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