Brazil's oil company Petrobras has agreed to sell its 49% stake in the sugar and ethanol joint venture Nova Fronteira Bioenergia SA to partner São Martinho SA, both companies said in securities filings on Thursday. Petrobras will receive 24 million new São Martinho shares as payment for the stake. Petrobras said in the filing that it will attribute a US$133 million value to the deal.
The 24 million shares São Martinho is going to issue are equivalent to 6.6% of its capital. The shares will not be subject to a lock-up period and Petrobras can sell them later in a structured process, the oil company said.
The sale is one of the five ongoing transactions that Brazil's federal auditing court did not prohibit Petrobras from doing in a recent decision that halted an asset-sale process. Petrobras has set a two-year goal of selling US$15.1 billion in assets by the end of this year despite the court's prohibition.
São Martinho´s new issuance to pay for the deal may help extend a 17% decline in the sugar and ethanol producer´s shares over the last two months. As the controlling shareholder in the joint venture, São Martinho had the right of first refusal when Petrobras decided to sell its minority stake.
The Nova Fronteira transaction marks another step in Petrobras' efforts to get out of the biofuels industry, which for years has soaked up enormous amounts of capital spending and was hurt by government price controls.
Petrobras has stakes in eight other sugar and ethanol plants in Brazil besides the one sold on Thursday. The oil company is also discussing the sale of a combined 45% stake in seven mills controlled by sugar producer Tereos SA.