Amid the current high risk envionment and the many cancelled IPOs, a fresh success story, and a big one. The Petrobras, PBR, IPO concluded yesterday. The company raised USD $70B from the Brazilian government and other investors in the world’s largest share sale.
PBR will use the proceed to develop offshore fields. The share price had taken a beating lately in anticipation but recovered nicely yesterday.
2.4 billion common shares were sold for 29.65 reais each and priced 1.87 billion preferred stock at 26.30 reais a piece.
Bloomberg reports: "The company is selling stock to fund development of oil deposits such as Tupi, the largest discovery in the Americas in three decades, and to preserve its investment grade credit rating. As part of the share sale, Petrobras issued about $42.5 billion of stock to Brazil’s government in exchange for the rights to develop 5 billion barrels of oil reserves.
“It’s positive that they managed to get such strong demand and the price was above market expectations,” said Mirela Rappaport, who helps manage about $100 million at Investport in Sao Paulo, including Petrobras shares. “In the long run, what will be important for Petrobras is if oil prices go up and for how long and at what cost it will take to develop oil reserves.”
Before the offering, Brazil’s government owned a 32 percent stake in Petrobras and controlled the company through 55.6 percent of voting shares. The sale will probably lead to an increase in the government’s stake, the company said in a Sept. 3 prospectus".