Brazilian Behemoth BNDES to Resume Talks for Asset Sales
Brazilian Behemoth BNDES to Resume Talks for Asset Sales
(Bloomberg) -- Brazil’s state development bank is again in talks to unload stakes in some of the nation’s largest companies, resuming a wave of asset sales aimed at reversing years of government influence in the economy.
BNDES has reached out to investors about selling its remaining holdings in the preferred shares of oil giant Petroleo Brasileiro SA, pulp maker Suzano SA, paper-packaging producer Klabin SA and miner Vale SA, three people familiar with the matter said, asking not to be identified because the talks are private. No decision has been made whether to dispose of the assets and there’s no time frame for the sales.
A BNDES spokesman declined to comment.
BNDES’s portfolio of publicly traded companies totals about 61.4 billion reais ($11.8 billion), according to figures for the end of March on the bank’s website. The proposed sales would resume a process of shrinking the bank’s market presence that was halted by the Covid-19 pandemic.
Petrobras will probably be the first candidate, one person said. BNDES holds 8% of the oil giant’s stock, even after selling 22 billion reais of common shares in February. Based on Wednesday’s closing price, the holding would be worth almost 24 billion reais.
BNDES’s 6.1% stake in Vale is equivalent to 19 billion reais, based on Wednesday’s closing price. It holds 11% of Suzano, or 5.9 billion reais, and 5.2% of Klabin, or 1.2 billion reais, BNDES filings show.
Petrobras’s preferred shares reversed earlier gains after Bloomberg reported the talks, while Vale pared its advance. Suzano and Klabin briefly trimmed their advance.
The strategy is to try to pursue the sales through block trades, the people said. Complex assets, which would require follow-on offerings with more elaborate price-setting processes and roadshows, would come after. That’s the case for the 21.3% stake BNDES holds in meat producer JBS SA.
Founded in 1952, BNDES was created to develop industry and infrastructure. It’s now a key part of President Jair Bolsonaro’s agenda to downsize the state. Under Chief Executive Officer Gustavo Montezano, who took over last year, BNDES has already sold its holding in another meat producer, Marfrig Global Foods SA, as well as the Petrobras sale, a deal that was Brazil’s biggest share sale in a decade.
The market rout caused by the pandemic put a stop to the earlier plans, which are now getting back on track as Brazilian companies complete share sales and initial public offerings. Last week, retailer Lojas Americanas SA raised 7.9 billion reais in a primary sale.
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