Brazilian state oil company Petrobras raised US$70 billion on Thursday in the world’s biggest share offering, giving the company the financial muscle it needs to tap vast offshore oil reserves.
The Rio de Janeiro-based company sold 1.87 billion new preferred shares at 26.30 reais each, the company said in a regulatory filing. It also sold 2.4 billion new common shares at 29.65 reais each.
The cash will help fund the world’s largest oil exploration plan, which at US$224 billion from this year through 2014 aims to turn Brazil into a major energy exporter.
The record-setting stock offering, which was larger than what the company originally planned but fell short of the maximum it had filed to sell, attracted total demand of US$140 billion. The bids included US$98 billion from existing shareholders and US$42 billion from institutional investors, a source with knowledge of the transaction said.
Sovereign wealth funds from the Middle East and Asia were among the investors buying into the offering, the source said on condition of anonymity.
The offering had “tremendous demand” from US mutual funds, the source added.
Petrobras said in the filing that it may sell another 188 million new shares to meet demand in the next 30 days.
Petrobras preferred shares, the company’s most widely traded class of stock, rose 3.2 percent to 26.80 reais, outpacing a 0.7 percent rise by Brazil’s benchmark Bovespa stock index. That was the stock’s largest single-day gain since Sept. 3.
The deal, comprising a US$43 billion oil-for-shares swap with the government and the cash offer that investors settled, topped Japanese telecommunications firm NTT’s US$36.8 billion 1987 share sale and Agricultural Bank of China’s (中國農業銀行) US$22.1 billion initial public offering earlier this year.
The share sale is a boon to Brazilian President Luiz Inacio Lula da Silva as he seeks to usher his anointed successor, former chief of staff Dilma Rousseff, into office in a presidential vote on Oct. 3.
Lula, who leaves office on Jan. 1, campaigned in favor of the offering with an eye on capitalizing Petrobras, whose growing stature is a source of pride for many Brazilians and mirrors Brazil’s rise on the global stage.
The capital plan was devised by the government to give Petrobras exclusive rights to develop 5 billion barrels of oil in one of the world’s most promising energy prospects — the deep waters off Brazil’s southern coast that are believed to hold more than 50 billion barrels of crude.
Rousseff, one of the main architects of the transaction, has insisted that it will allow the state to boost its share of the total capital in Petrobras, though the government already controls a majority of the voting shares.
She led last year’s proposed overhaul of Brazil’s oil legislation to give the government greater control over new reserves and put Petrobras in all major deep-water projects, possibly stretching the company too thin.
Petrobras needs fresh cash to develop the vast reserves buried deep beneath the ocean under a layer of salt in a region known as the subsalt. Tapping those reserves could in the coming years help push Petrobras’ production above that of the world’s biggest private oil companies, including Exxon Mobil and Chevron.
WHEELING AND DEALING? Hou You-yi, Ko Wen-je, Eric Chu and Ma Ying-jeou are under investigation for allegedly offering bribes for the other side to drop out of the race Taipei prosecutors have started an investigation into allegations that four top politicians involved in attempts to form a “blue-white” presidential ticket have contravened election regulations. Listed as defendants are Chinese Nationalist Party (KMT) presidential candidate and New Taipei City Mayor Hou You-yi (侯友宜), KMT Chairman Eric Chu (朱立倫), former president Ma Ying-jeou (馬英九) of the KMT and Taiwan People’s Party (TPP) Chairman and presidential candidate Ko Wen-je (柯文哲). The case stemmed from judicial complaints filed last month with the Taipei District Prosecutors’ Office alleging that the KMT (blue) and the TPP (white) had engaged in bribery by offering money or other enticements
ELIGIBLE FOR JANUARY: All presidential candidates and their running mates meet the requirements to run for office, and none hold dual citizenship, the CEC said Taiwan People’s Party (TPP) Legislator and vice presidential candidate Cynthia Wu (吳欣盈) is working with the Central Election Commission (CEC) to resolve issues with her financial disclosure statement, a spokesman for the candidate said yesterday, after the commission published the statements of all three presidential candidates and their running mates, while confirming their eligibility to run in the Jan. 13 election. Wu’s office spokesman, Chen Yu-cheng (陳宥丞), said the candidate encountered unforeseen difficulties disclosing her husband’s finances due to being suddenly thrust into the campaign. She is also the first vice presidential nominee to have a foreign spouse, complicating the reporting of
GOOD NEWS: Although open civic spaces are shrinking in Asia-Pacific countries and territories, Taiwan’s openness is a positive sign, an expert said Taiwan remains the only country in Asia with an “open” civic space for the fifth consecutive year, the Civicus Monitor said in a report released yesterday. The People Power Under Attack 2023 report named Taiwan as one of only 37 open countries or territories out of 198 globally, and the only one in Asia. Compiled by Civicus — a global alliance of civil society organizations dedicated to bolstering civil action — the ranking compiled annually since 2017 measures the state of freedom of association, peaceful assembly and expression around the world. Researchers assign each country or territory one of five rankings describing the
NOT JUST CHIPS: Although semiconductor processes are on the list, it also includes military technology and post-quantum cryptography to combat emerging cyberthreats The National Science and Technology Council (NSTC) yesterday released a list of 22 technologies it considers crucial to the nation’s security and competitiveness, including the 14-nanometer semiconductor process and advanced chip packaging. For the first time, the council made a list of core technologies with an aim of preventing secret information about those technologies being leaked to foreign countries, which could put the nation’s security and the competitiveness of local industries at risk. For years, local semiconductor companies have faced challenges from talent poaching and theft of corporate secrets by Chinese competitors, who are seeking to rapidly advance their technology capabilities through
RSS