Brazilian oil company to issue $64.5 bln shares to finance oil exploration

Brazil's oil company Petrobras Friday said it planned to issue new stock worth 64.5 billion U.S. dollars, which would be one of the world's largest share offerings.

The offer includes a 43-billion-dollar oil-for-shares swap with the Brazilian government, as the company agreed Wednesday to buy the country's oil reserves equivalent to 5 billion barrels with a unit price of 8.51 dollars.

Besides, the company would set up 2.17 billion new common shares, 1.59 billion new preferred shares and the American Depository Receipts (ADR) for common shares, which would be traded on the New York Stock Exchange from Sept. 24.

Consultants estimated that the offer would be expanded to about 70 billion dollars if Petrobras sells an additional 564 million shares to meet the huge market demand.

The raised funds, which will go to the company's future investment, are estimated to generate 224 billion dollars over the next five years.

The company's capitalization will register more than 40 percent growth due to the stock issue. Currently, its total market value amounts to about 260 billion dollars.

The operation of new shares on the Sao Paulo Stock Exchange would begin on Sept. 27, the company said.

Petrobras, also listed on the stock exchange of Madrid and Buenos Aires, is controlled by the Brazilian government, which has a 39-percent share stock in the company.

However, it was estimated that the federal could raise its stake to 49 percent due to the 43-billion-dollar swap deal.

Two technical teams of the company started their trips on Sunday for Europe, the United States, Asia and the Middle East to promote the offer to international investors.

The oil reserves, recently discovered off the coast of Brazil, were about 7,000 meters below the sea level and extending nearly 1,300 km between the states of Santa Catarina and Espirito Santo. It may turn Brazil into one of the ten largest oil producers in the world.

Source:Xinhua