Petrobras drills home its advantages
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| Chief executive Edemir Pinto, Brazil’s vice-president Jose Alencar, president Luiz Inácio Lula da Silva, finance minister Guido Mantega and Petrobras chief executive Jose Sergio Gabrielli attend a ceremony to mark the start of the offering of shares by Brazilian state oil company Petrobras in Sao Paulo September 24 |
Petrobras’s eagerly anticipated follow-on equity issue priced at the higher end of expectations, benefiting from heavy global demand for the shares. Demand reached $128 billion according to reports as Euromoney went to press ($98 billion from existing minority shareholders and $30 billion from institutional investors), enabling the Rio de Janeiro-based oil company to raise a record $70 billion by selling 1.87 billion preferred shares at R$26.30 and 2.4 billion common shares at R$29.65. Petrobras benefited from the sheer scale of global liquidity looking for investment opportunities in the emerging markets, and its being Brazilian and in the oil industry meant there was appetite from many investors underweight in these asset classes. Sovereign wealth funds in Asia and the Middle East reportedly showed strong demand for the equity, as did US mutual funds.
