MOSCOW (MRC) -- Brazil’s state-owned oil company Petrobras and Novonor (formerly Odebrecht) cancelled in “mutual agreement” its plans to sell its stake in Braskem, according to BondEvalue.
The announcement came after both companies declared that potential buyers did not meet expectations, without providing any further details on the matter.
Petrobras and Novonor said “The volatile conditions in the financial and capital markets resulted at this time in demand and price levels not appropriate for the conclusion of the transaction.”
The stake in Braskem was expected to be offloaded by February with estimates that the deal could be worth BRL 8.3bn (USD1.47bn) for 20% of Braskem.
Petrobras owns 36.14% of Braskem's shares, including 47.03% of its voting shares. Novonor, a construction company, owns 38.32% of Braskem's shares and 50.11% of its voting shares, either directly or through its subsidiary OSP Investimentos. The two still plan on selling their stakes, but at a time when the markets are less volatile and the economic outlook is more favourable, Petrobras said.
As MRC wrote previously, in August 2021, Petrobras hired JPMorgan Chase & Co as an advisor to sell its stake in the petrochemical company Braskem SA.
We remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).
Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras' activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.
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