Brazil’s state-controlled oil giant Petrobras announced that it started a due diligence process to decide whether to purchase a controlling stake or exercise tag-along rights in a potential sale of Braskem, Latin America’s biggest petrochemical group, by controlling group Novonor (formerly called Odebrecht).
As a minority owner of around 36 percent of Braskem’s stock, Petrobras is entitled to tag-along rights — the option to participate in the sale planned by the majority. Alternatively, Petrobras could decide to buy Novonor’s stocks instead and become the majority shareholder.
Petrobras stressed in its statement to investors that it has for now made no decision either way.
Back in June, Unipar, a São Paulo-based chemical producer, made a non-binding offer to pay BRL 35 (USD 7.20) a share for Braskem — all cash. The BRL 10 billion (USD 2 billion) offer stands for 30 days. A few days later, Mines and Energy Minister Alexandre Silveira said that the federal government is in favor of Petrobras keeping its participation in Braskem.
Petrobras has the preference to acquire Novonor’s stake in the petrochemical group.
Back when it was known as Odebrecht, Novonor fell into disgrace following Operation Car Wash, an anti-corruption investigation that revealed how the company systematically bribed politicians. It now desperately needs to raise money to pay part of its massive liabilities.
Braskem has scared off potential suitors in recent years due to its exposure to liability for tremors in the city of Maceió caused by abusive salt mining practices. The shocks damaged entire neighborhoods and forced thousands to abandon their homes. The Brazilian Report produced an award-winning story on the Maceió case.
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