SAO PAULO: Brazilian company Petroleo Brasileiro SA is said to have raised around $ 2.3 billion (RM 9.6 billion) in the biggest sale of shares in Latin America so far this year.

Petrobras, as the company is known, has sold its remaining stake in fuel distributor Petrobras Distribuidora SA in a bid for 26 reais (US $ 5.23 or RM 21.70) each, according to sources.

The sale is part of a larger plan by the oil giant to pull out of non-core businesses, reduce debt and focus on deepwater projects.

Downsizing is also part of the government’s strategy to divest state-managed assets.

The campaign, one of Economy Minister Paulo Guedes’ main promises when he took office in 2019, has been on hold for most of the past year after the pandemic devastated the economy.

The government recently won a victory after securing congressional approval to sell utility giant Eletrobras, fueling investor optimism.

The divestment also takes place in a context of recovery of Brazilian assets.

The real is trading near its highest level in a year, the Ibovespa stock index hit a record earlier this month and the government exploited the international bond market on Tuesday.

The South American nation, one of the world’s largest commodity exporters, is now expected to grow by more than 5% in 2021.

Wednesday’s deal – the largest in Latin America so far this year – raises around 11.4 billion reais (RM9.5 billion).

The stake, 436,875,000 shares with voting rights, is equivalent to 37.5% of the company.

It’s also one of the top five secondary offerings in the country since at least 1990, according to data compiled by Bloomberg.

Petrobras did not immediately respond to an email request for comment.

BR Distribuidora declined to comment, citing a period of calm. Brazil Journal first reported on the price of the offer.

Petrobras began divesting BR Distribuidora during the company’s initial public offering in 2017.

Two years later, he sold control of the company in a public share offer, bringing in around US $ 2.2 billion (RM 9.14 billion) and ending the government control over the biggest player in the sector.

A further divestiture would make a significant contribution to Petrobras’ asset sale program, while cementing the independence of BR Distribuidora, BofA analyst Frank McGann wrote in a June 13 report.

BR Distribuidora, which has more than 8,000 gas stations and more than 1,000 convenience stores across Brazil, posted gains in the first quarter and recently launched cost-cutting measures, including downsizing.

Shares have risen 21% this year, outperforming the country’s main stock market gauge by about 14 percentage points.

The stock is expected to “continue to perform well after the deal closes, as it removes the surplus that was weighing on the stocks,” as well as the risks associated with state-controlled companies, Credit Suisse analysts wrote. led by Regis Cardoso. a report dated June 29.

Cardoso reaffirmed an outperformance rating and increased his price target to 39 reais (32.6 RM) from 32 reais (26.8 RM).

Petrobras has stepped up efforts to divest non-core assets under former chief Roberto Castello Branco, who was replaced by former general Joaquim Silva e Luna earlier this year. – Bloomberg