Brazilian state-owned multinational company Petrobras has signed the contract to sell its Landulpho Alves Refinery (RLAM) refinery and associated logistics assets to Abu Dhabi’s Mubadala Capital for $1.65 billion.
According to the company statement, its board has authorized the sale to Mubadala Capital, under the aegies of its MC Brazil Downstream Participações unit.
The agreement allows for price adjustments due to changes in networking capital, net debt, and investments until the closing of the transaction, and the operation is subject to approval by Brazil’s Administrative Council for Economic Defence (CADE).
The sale of RLAM is in accordance with a National Energy Policy Council resolution that provided guidelines for the promotion of free competition in the national refining sector, and it reflects the June 2019 agreement between Petrobras and CADE to open the refining sector in Brazil, as per the company.
“Today is a very happy day for Petrobras and Brazil. It is the beginning of the end of a monopoly in an economy still with monopolies in several activities. The divestment of RLAM contributes to the improvement of capital allocation, reduction of the still high indebtedness, and to start a process of reducing the risks of political interventions in fuel pricing, which caused so much damage to Petrobras and to the Brazilian economy itself. The transaction undoubtedly satisfies the best interests of Petrobras’ and Brazil’s shareholders.”
According to the reports, “This disclosure to the market is following Petrobras’ internal rules and with the special regime for divestment of assets by federal mixed economy companies, provided for in Decree 9,188/2017.”
Furthermore, the transaction is in line with the company’s current strategic plan, and it is consistent with portfolio management and capital allocation improvement, to generate value for its shareholders.