Petrobras will assume Eletrobras' debt with BR Distribuidora.
Petrobras has approved the corporate restructuring of its wholly-owned subsidiary, Petrobras Distribuidora (BR), with a capital injection of approximately R$ 6,3 billion; the funds generated by the capital injection will be used entirely to prepay debts previously incurred by BR and guaranteed by Petrobras.
SAO PAULO (Reuters) - Petrobras has approved a corporate restructuring of its wholly-owned subsidiary Petrobras Distribuidora (BR) and a capital injection of approximately 6,3 billion reais into the company, the state-owned company said in a statement on Friday.
The move comes at a time when Petrobras is considering conducting an initial public offering (IPO) of its fuel distribution subsidiary later this year, with the aim of raising funds as part of its divestment and partnership program.
According to Petrobras, the operation announced this Friday will involve a partial spin-off of BR, separating receivables arising from debt acknowledgment agreements with companies in the state-owned Eletrobras group that have real guarantees, and receivables held by BR with other companies in the Petrobras system.
The spun-off portion of BR will be incorporated into Downstream Participações Ltda, a subsidiary whose share capital is wholly owned by Petrobras.
Eletrobras and its subsidiaries have billions of dollars in debt to Petrobras and BR Distribuidora for supplying fuel to power the state-owned power company's thermal power plants, mainly in the North of the country.
Part of these debts is secured by pledges of credits originating from an electricity sector fund that subsidizes thermal generation in the North, the so-called Energy Development Account (CDE), which is funded by charges levied on consumers' electricity bills.
The debts have even led Petrobras to refuse to supply fuel to a huge Eletrobras thermal power plant in Amazonas, which until now has been supplied by the oil company due to a court decision.
Petrobras also stated that the funds generated by the capital injection into BR Distribuidora will be used entirely to prepay debts previously incurred by the subsidiary and guaranteed by Petrobras.
The state-owned company said that the transactions will be carried out at book value and based on an appraisal report, without impacting the companies' results, since Petrobras owns all of the capital of both companies.
"The operation also does not generate a significant impact on the net worth of Petrobras and BR," the oil company clarified in the statement.
The transactions are still subject to approval at a general shareholders' meeting of BR Distribuidora and by a meeting of Downstream's partners. A statement from the Secretariat for Coordination and Governance of State-Owned Enterprises is also required, as well as a decision on the incorporation of Downstream by the competent corporate bodies.