Petrobras Hunts ‘Hidden Values’ for Potential Stock Sales
By Sabrina Valle / Bloomberg
11:31 AM BRT
April 24, 2015
Petrobras, the world’s most indebted oil producer, may sell stakes in some assets via initial public offerings as part of a wider effort to boost cash levels and improve its financial health.
“Our role here is to find the hidden values,” Chief Financial Officer Ivan Monteiro said in an interview Thursday. “There are tons of hidden values at Petrobras, I would say barrels of hidden values.”
Monteiro is one of the two bankers President Dilma Rousseff chose in February to steer the oil producer out of an accounting crisis that threatened to trigger an acceleration of debt payments. On Wednesday it released audited financial results after five months of back and forth with auditors about graft-related costs, calming credit markets. Their next challenge will be restoring cash flow and reducing debt.
While Monteiro declined to name specific targets for IPOs, he said the “gas pipeline infrastructure” is an example of an area where Petrobras’s control of the market increases value.
“For several of these issues there is only one company, that brings a lot of value,” he said from the 19th floor of Petrobras’s headquarters in Rio de Janeiro. “Where are the hidden values? There are several.”
BB Seguridade
Monteiro recalled his previous work at Banco do Brasil SA, where he and Chief Executive Officer Aldemir Bendine held the same posts until joining Petrobras in February. In 2013 he helped organize the IPO of the bank’s insurance unit, BB Seguridade Participacoes SA.
At Petrobras, formally known as Petroleo Brasileiro SA, he is turning to revising the five-year business plan that calls for production increases, even with a reduction in investments through at least 2016.
The next 30 days will be dedicated to designing a plan focused on de-leveraging the company and on a fuel policy that guarantees competitive, market prices, Monteiro said. Government-mandated fuel subsidies cost the company billions of dollars in losses during the commodities boom.
Petrobras could return to the dollar-bond markets as soon as this year after the delay in releasing earnings had all but closed off credit markets, Monteiro said.
While a foreign debt or domestic issuance is a possibility, there’s no chance of a share sale any time soon, he said, adding that such an operation would have to go through Congress.
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