BTG Pactual considers keeping stake in Petrobras Africa

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In an interview with Reuters, a source said BTG Pactual SA, Brazil’s largest independent investment bank, may keep its stake in Petrobas Oil and Gas BV (Petrobras Africa) to avoid booking a loss in a potential sale.

In June 2018, it was reported that a consortium led by Vitol, one of the world’s largest oil trader, had entered exclusive talks to acquire Petrobras Africa, as the company is known to be worth up to $2.5 billion.

Petroleo Brasileiro SA, a state-controlled oil company, which owns 50 percent of the venture, would be the lead seller. However, BTG’s 40 percent stake and Helios Investment Partners’ 10 percent would also be candidates for the sale.

BTG would have to book a loss if Petrobras Africa were sold at Vitol’s proposed price, as the bank paid $1.5 billion for its initial 50 percent stake acquired in 2013. Previously, BTG had decided in favor of selling the stake, but the bank now believes that Petrobras Africa, which participates in two deep water oil exploration blocks off the coast of Nigeria, will soon start to generate stable cash flow and generate regular dividends.

The source however noted that BTG would still be willing to sell only if Vitol were to raise its bid. A newspaper called Valor Economico reported that BTG intended to keep its stake in Petrobras Africa, but no decision had been made.

Petrobras Africa is one of the last remaining stake BTG Pactual owns in individual companies. The bank was forced to shed assets, while BTG partners decided to divest illiquid stakes after its founder Andres Esteves, was arrested on corruption charges.

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