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Petrobras Stake Sale Raises $1.9 Billion for Brazil's Caixa

Petrobras Stake Sale Raises $1.9 Billion for Brazil's Caixa

(Bloomberg) -- Caixa Economica Federal raised about 7.3 billion reais ($1.9 billion) by selling a stake in oil and gas giant Petroleo Brasileiro SA, as Brazil’s biggest state-owned lender works to help the government reduce its debt.

Caixa on Tuesday sold about 241.3 million shares at 30.25 reais apiece, Petrobras said Wednesday in a filing. The offering in Brazil and New York included only ordinary shares, the ones with voting rights. Those shares fell 0.2% at 15:28 in Sao Paulo, to 30.64 reais.

Proceeds will be used to help the lender pay back 40 billion reais in perpetual bonds to Brazil’s federal government, which is pushing to reduce a budget deficit that remains above 6% of gross domestic product. Pedro Guimaraes, who took over as Caixa’s chief executive officer on Jan. 7, said the bank plans to sell more assets.

“Our priority is to brutally shrink expenses and make some strategic moves, even before we move on to doing IPOs of our subsidiaries,” he said. The lender plans dual listings in Brazil and New York to sell minority stakes in its insurance and card units this year. The asset-management and lottery subsidiaries will go public in 2020, he said.

See also: Brazil expedites asset-sale plan with Petrobras stake

To spearhead asset sales, Guimaraes brought in former UBS Group AG investment-banking executive Andre Laloni as chief financial officer. Since his arrival, a fund managed by Caixa sold its 2.5 billion-real stake in IRB Brasil Resseguros SA, Latin America’s biggest reinsurer. The deal, the new government’s first privatization, gave Caixa a gain of more than 800% on shares purchased in 2015.

Underwriters for the Petrobras transaction were Caixa’s investment bank, UBS, Morgan Stanley, Bank of America Corp. and XP Investimentos SA.

To contact the reporter on this story: Cristiane Lucchesi in Sao Paulo at clucchesi5@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Dan Reichl, Steve Dickson

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