Friday, September 24, 2010

"Petrobras raises $70bn despite fears over state role"

In early trade the stock is down a dime at $35.49.
From the Financial Times' beyondbrics blog:
It is finally a done deal: Petrobras will sell about $70bn worth of shares in the biggest share issue in corporate history after enthusiastic investors asked for double that amount.

The price and size of the offer were revealed late on Thursday - the last day of bookbuilding - after a two hour meeting by video-conference from the Brazilian national oil company’s São Paulo office, joined by Sergio Gabrielli, chief executive and bankers from New York. At 29.65 Brazilian reals (US$17.25) per share, the ordinary shares are being sold at a fraction below Thursday’s stock market closing price. The preferred stock is going for R26.30.

The key issue now is how far the government, the controlling shareholder , will go in increasing its stake in the company by buying extra stock. It wants to keep a grip on its biggest national asset - but some investors fear that if it goes too far, Petrobras could start behaving like a state agency.
A person involved told beyondbrics the government would buy more than the approximately $43bn worth of shares it would receive from Petrobras in exchange for the rights to 5bn barrels of oil from the huge pre-salt fields - though he would not say how much more.

This question has been vexing investors since the capitalisation plan was announced in June....MORE
See also yesterday's Bizarro World: "Petrobras stocks rise ahead of share issue" (PBR) which links to an FT Energy Source post that pointed out the stock's incongruous up move in the face of the offering.