Petrobras, Novonor to Sell $1.5 Billion Braskem Stake

(Bloomberg) -- The controlling shareholders of Braskem SA are seeking to raise about $1.5 billion by selling shares in the petrochemical firm in what is expected to be one of Brazil’s largest equity offerings this year. 

State-owned oil producer Petroleo Brasileiro SA and Novonor, the industrial conglomerate previously known as Odebrecht, filed for a secondary offering to sell as many as 154,886,547 preferred Braskem shares. They can raise a combined 8.1 billion reais ($1.5 billion) based on the stock’s close on Friday. The price per share will be set on Jan. 27, according to the prospectus. 

Braskem said that Morgan Stanley, JPMorgan Chase & Co., Banco Bradesco BBI, Banco Itau BBA, Citigroup Inc., UBS BB Investment Bank, Banco BTG Pactual SA and Banco Santander Brasil SA are handling the transaction. If the offering is fully sold, Petrobras and Novonor will virtually scrap all of their Braskem’s preferred stock, keeping just common shares. 

Novonor, which has been struggling to recover from the Carwash corruption probe, said it will use part of the proceeds to pay debt with creditors Bradesco, Itau and Santander. For Petrobras, the sale is another breakthrough in its strategy of divesting from non-core assets to focus on the pre-salt region in Brazil’s deep waters. 

Shares of Braskem, one of the world’s top petrochemicals makers, fell as much as 5.1% in Sao Paulo Monday on the back of the announcement. The stock jumped 145% last year, the second-best performer on Brazil’s main stock gauge. Analysts are forecasting potential gains of about 33% from current levels, Bloomberg data show.

Investment bankers are predicting a drop in Brazil’s share offering activity following a strong 2021, but bigger deals are expected to arise as rising interest rates and election anxiety heighten the appeal of more liquid transactions. 

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