The sale of a slice of BR Distribuidora or attracting a private partner for the company will be the first step in Petrobras’ (PBR) asset sale plan, necessary to reduce the company’s debt level. Last night, the company officially announced this intention. The plan is to try and complete the operation this semester.
The state-controlled company considers the possibility of two operations: an IPO (initial public offering) and/ or to attract a partner. The IPO would promote a ‘governance shock’ in the company, which is now a wholly owned subsidiary of Petrobras. The ‘benchmark’ is Ultra Group – Ultrapar (UGP).”
BR Distribuidora is the largest distributor in the country with 7,797 gas stations. It has 36.9% of the fuel market, with sales of R$ 121.7 billion and profit of R$ 1.1 billion in 2014. Ultrapar, which has 7,100 stations, sold R$ 69.7 billion and had a profit of R$ 1.2 billion.
Using the market value of Ultrapar as a reference – today, around 12 times its cash generation (EBITDA) – it is possible to estimate that BR can be worth close to R$ 40 billion. In theory, to sell half of the shares, Petrobras would raise R$ 20 billion (aprox. US 6 billion) However, because it is state owned, investors may demand a reduction in multiples.
In the announced business plan for 2015/2019, Petrobras set a realistic target of increasing oil production – from 2.8 million barrels per day to 4.2 million in 2020. The next step was to announce an ambitious assets sales plan, US$ 58 billion in four years. “We will combine realistic production goal with sale of assets, attract partners, reduce costs and a better way of doing things. We forced this situation on purpose and the announcement about BR is the first major move in that direction”, he said. In the model to attract partners, Petrobras plans to have different partners in different parts of the business.
Leave a Reply