State-owned Petróleo Brasileiro SA (Petrobras), Rio de Janeiro, said on Jan. 17 that it will resume the competitive process for the sale of its 100 percent ownership stake in nitrogen fertilizer plant Araucária Nitrogenados S.A. (ANSA), in Paraná state, following a decision to proceed by its Executive Board.
Petrobras was forced to suspend the divestment process for the nitrogen fertilizer plant, and for certain other major asset sales, following a Federal Supreme Court’s ruling in July that privatization deals must be authorized by the country’s Congress (GM July 6, 2018).
Petrobras said it had taken into consideration the opinion of the Federal Audit Court, and had concluded that the group meets the requirements placed in the scope of the analysis by the Federal Supreme Court since “it holds a legislative authorization to sell its subsidiaries” and obey the constitutional principles when divesting.”
Petrobras in September 2017 (GM Sept. 15, 2017) put ANSA up for sale as a package with the still-to-be-completed nitrogen fertilizer complex, Unidade de Fertilizantes Nitrogenados III (UFN-III) in Três Lagoas, Mato Grosso do Sul state. Last May, Petrobras revealed that it had entered into exclusive negotiations with Russian fertilizer group Acron for a period of 90 days for the sale of its entire 100 percent stakes in the two fertilizer assets (GM May 11, 2018). Acron, for its part, has never confirmed publicly its interest in the Petrobras fertilizer assets.
The divestment position on UFN-III remains unclear, however. Shortly after the injunction was imposed (GM July 20, 2018), Petrobras insisted that as far as its fertilizer assets were concerned, the injunction applied only to ANSA, and that it was possible to continue “the discussions and negotiations regarding the technical aspects that are part of the UFN-III sale, aiming at a future conclusion of this transaction.”
In a December statement, however, the group confirmed that the divestment of UFN-III and ANSA were on hold (GM Dec. 7, 2018). Under its 2040 Strategic plan and 2019-2023 Business and Management Plan (BMP), Petrobras is hoping to raise as much as US$26.9 billion, through asset sales and partnerships, by 2023 to reduce debt.
Last week (GM Jan. 11, p. 25), Petrobras announced that it was initiating the leasing process for its two nitrogen fertilizer plants in northeastern Brazil, which are located at Camacari, Sergipe, and at Laranjeiras, Bahia. In early November, it pushed back the planned mothballing of the plants to Jan. 31, 2019 (GM Nov. 2, 2018).
Ultimately, Petrobras plans to exit the fertilizer sector. In December, it revealed that its 2019-2023 BMP included the “exiting of its fertilizer, LPG distribution businesses, and biodiesel and ethanol production interests.”