Petrobras (PBR, $14.67) to Raise $26.9 Billion via Asset Sales and Partnering
Brazilian state-run oil company, Petroleo Brasileiro SA, commonly known as Petrobras, revealed that it plans to raise around $26.9 billion through asset sales and partnerships by 2023, as part of its new five-year business plan.
Under this plan, the company intends to raise $84 billion in investments, while boosting investments on the front edge of anticipated production boom in Brazil.
According to the company, it aims to make $84.1 billion in investments from 2019 to 2023, compared to its previous five-year investment plan of $74.5 billion from 2018 to 2022.
The Company plans to put its fertilizer plants, liquefied petroleum gas unit and its biodiesel and ethanol businesses under the hammer.
With Petrobras trying to stay on course for its effort to reduce one of the heftiest debt loads among oil companies worldwide - $88 billion in gross debt -- this divestment strategy can be highly beneficial for the company.
Although this plan doesn’t seem contain any major surprise, it was revealed just when prosecutors in Brazil alleged that trading giants Vitol, Trafigura, and Glencore paid over $30 million in bribes to Petrobras employees.
The company is also hopeful that its return on invested capital could top 11% in 2020, while its ratio of net debt to EBITDA should fall below 1.5x in 2020.
