Petrobras scraps Liquigas IPO, eyes antitrust risk in sale -sources

Aygaz

25/04/2018 21:44

By Tatiana Bautzer and Carolina Mandl
    SAO PAULO, April 25 (Reuters) - Petroleo Brasileiro SA
 PETR4.SA  has given up on the idea of selling its Brazilian
liquefied petroleum gas (LPG) unit through an initial public
offering (IPO) and decided to reopen a sale process, three
people with knowledge of the matter said.
    The state-controlled oil company has not yet set a date for
interested companies to deliver bids and is still discussing the
best way to avoid problems with antitrust authorities, the
sources added, asking for anonymity because talks are private. 
    Petrobras, as the company is known, has sounded out banks
and investors for a potential IPO of Liquigas Distribuidora SA,
but advisers said it would be a hard sell, especially to
international investors, according to the sources.
    Liquigas sells gas cylinders, used mainly for cooking in
Brazilian households not served by gas pipelines — a segment
unfamiliar to investors in more developed markets. 
    Petrobras had agreed to sell the subsidiary to a unit of
Ultrapar Participações SA  UGPA3.SA  in 2016 for 2.8 billion
reais ($800 million), but Brazilian antitrust watchdog Cade
blocked the deal. Ultragaz, a unit of Ultrapar  UGPA3.SA , is
Brazil's largest LPG distributor and Liquigas is the second
biggest.
    In talks with banks, Petrobras has discussed how to
structure the sale process without triggering antitrust issues. 
    The easiest solution would be a sale to foreign buyers with
similar businesses, such as Turkey's Aygaz AS  AYGAZ.IS  or
Chile's Empresas Copec SA  COP.SN , sources said.  
    Some of the Brazilian rivals that bid for the asset are
still interested, such as Copagaz Distribuidora de Gas. But a
sale to a Brazilian rival would be trickier, and some 
representatives of Brazilian companies have been lobbying
Petrobras to break up the subsidiary before the sale, one of the
sources said.
    A third option would be to require proposals that already
include remedies for potential antitrust concerns. So far, no
decision has been taken, the sources added.
    Petrobras responded to a request for comment by referring to
a previous securities filing in which it said details of the
deal had not been defined. Copagaz, Aygaz and Copec did not
immediately comment on the matter.
    
    ($1 = 3.50 reais)

 (Reporting by Tatiana Bautzer and Carolina Mandl; Editing by
Tom Brown)
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