By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – The board of directors at Brazil’s oil giant Petrobras, announced that it had authorized the sale of 25 percent of stock from its subsidiary, BR Distribuidora. The state-owned oil giant wants sell part of its stock to improve the company’s financial situation.
For the first six months of 2015, Petrobras’ net income totaled R$5.86 billion, down by 43 percent from the same period in 2014. Currently, all stock from BR Distribuidora is controlled by Petrobras. The company, however, noted that the sale of stock would depend on ‘favorable conditions of the international and national capital markets’.
Petrobras’ CEO, Aldemir Bendine, had stated in a press conference in at the beginning of August that company officials were discussing an IPO (Initial Public Offering) for the subsidiary due to the losses registered in 2014 and the weak results for the first semester of 2015 for the group as a whole.
In April, company officials announced that corruption, bribes and devaluation of assets (impairment) cost the company over US$17 billion in 2014, and that the company net results were negative by over US$7 billion last year. The results for the second quarter of 2015 shows that the company’s net revenues declined by almost ninety percent in relation to the same period last year.
According to daily O Globo, two council members, including board president, Murilo Ferreira, voted against the IPO, stating that an approval of a business plan for BR Distribuidora needed to be approved before any stock were offered.
UBS Security analysts recently appraised BR Distribuidora as being worth approximately US$10 billion.