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Petrobras approves BR Distribuidora IPO

Jul 13, 2017

The Brazilian energy company’s board gives its fuel distribution unit the green light for a secondary equity offering

Kevin Gray

Keywords: petrobras BR distribuidora equity markets

Petrobras’ board has approved a potential all-secondary IPO for its service station unit BR Distribuidora with proceeds going directly to the Brazilian energy company.

BR Distribuidora will likely list the shares on Brazil’s Novo Mercado, a segment of the stock exchange governed under stricter rules. Any shares trading on the Novo Mercado must have voting rights.

The state-owned firm last month  reignited talk of a potential IPO for its fuel distributor, almost two years after UBS valued BR Distribuidora at nearly $10bn.

Petrobras has also explored the idea of selling a majority stake in BR Distribuidora, but faced a roadblock in December when a court order barred a potential sale.

A federal court lifted the injunction in May, allowing Petrobras to move ahead with its $21bn asset divestment plan.

Petrobras' board had planned an initial public offering of BR Distribuidora shares in October 2015. But it eventually suspended the plan due to complex market conditions and FX volatility.

Bank of America Merrill Lynch, BB Investimentos, Bradesco, BTG Pactual, Citi, Itau BBA and Santander were understood to be coordinating the original IPO.

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