28 August 2015, News Wires – Management at Brazil’s state-controlled Petrobras has urged the company’s board to delay a planned initial public offering of its fuel distribution unit as market conditions soured, according to reports.
Management told the board that the impact of market turmoil on strategic decisions like BR Distribuidora’s listing should be analysed more carefully, Reuters reported, citing a source with direct knowledge of the talks.
Petrobras announced BR Distribuidora’s planned listing on 7 August.
The uncertainty underscores growing doubts within Petrobras about the deal, which has attracted great interest from foreign and local investors. Last week, the minutes of a recent board meeting showed that Chairman Murilo Ferreira questioned whether the BR Distribuidora IPO was the best option to help cash-strapped Petrobras reduce its swelling debt.
An IPO of BR Distribuidora was thought to occue as soon as October, Reuters said. The company controls Brazil’s largest gasoline, ethanol and diesel service-station network.
Petrobras is disposing of $15.1 billion of non-core assets by the end of next year as part of an effort to trim its $132 billion debt, the largest of any oil company.
UBS Securities analysts recently valued BR Distribuidora at about $10 billion.
Petrobras had reportedly hired Citigroup to advise on strategic options for BR Distribuidora.
Separately, Reuters reported that Petrobras needs $4.3 billion to complete the first 165,000 barrel-per-day operating unit at its stalled Comperj refinery outside Rio de Janeiro.
The company expects to complete the first train at the plant in Itaborai in 2020.