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SAO PAULO (Reuters) – Brazilian conglomerate Novonor, its creditor banks and state-controlled oil company Petrobras are expected to take a first step to divest from petrochemical company Braskem SA (NYSE:BAK) in the fourth quarter, three sources with knowledge of the matter said.
Novonor, formerly known as Odebrecht, is discussing a plan for multiple share offerings with its creditors. The first would unload Braskem preferred shares owned by Novonor over the next months. Petrobras, a minority shareholder in Braskem, has been invited to join all share offerings and divide the proceeds, the sources said.
The first offering may reach around 9 billion reais ($1.65 billion) if Petrobras also participates, the sources said.
After selling the preferred stake, equivalent to around 20% of Braskem’s capital, Novonor, its creditors and Petrobras will discuss the best time frame to sell their common stock, added the sources, who asked for anonymity to disclose private talks.
Novonor and Petrobras declined to comment on the matter.
Before the next share offerings, the company may complete the listing of its shares on the Novo Mercado, a segment in the Brazilian stock exchange with higher standards for corporate governance.
But creditors and shareholders want to sell the stakes as soon as possible to avoid a share offering months before a contentious presidential election in Brazil, which is expected to create market volatility.
The process is being managed by some of Brazil’s biggest banks, which extended billions of dollars in loans to the former Odebrecht and have grown frustrated by the amount of time it has taken to recover funds from the company. The former Odebrecht was a key player in the country’s Car Wash corruption scandal, and is now under bankruptcy protection.
Novonor’s 38.3% stake in Braskem is the collateral to the largest loans. Creditors have decided to sell Braskem through share offerings because no buyers for the entire company emerged during a formal M&A competitive process managed by Morgan Stanley (NYSE:MS) at Novonor’s request.
Other bids for parts of the business were considered too low, the sources added.
It is clear, however, that the divestment could not be done in a single share offering. Although the banks have priority in receiving the proceeds of the Braskem sale, they are coordinating the exit strategy through multiple offerings with Petrobras, owner of 36.1% of Braskem.
Shares of Braskem have soared 150% this year, driven by higher prices for resins and lower debt, while the broader Ibovespa index is down 6%. The company, which has also been settling disputes in Mexico and in the Brazilian state of Alagoas, has a market capitalization of 47 billion reais.
($1 = 5.4386 reais)
