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Petrobras raises US$70 bln in largest share offering
Source: Agencies |
September 24, 2010, Friday
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BRAZILIAN state oil company Petrobras raised US$70 billion yesterday in the world's biggest share offering, giving the company the financial muscle it needs to tap vast offshore oil reserves.
The Rio de Janeiro-based company sold 1.87 billion new preferred shares at 26.30 reais (US$15.29) each, the company said in a regulatory filing. It sold 2.4 billion new common -- or voting -- shares at 29.65 reais each.
The cash will help fund the world's largest oil exploration plan, which aims to turn Brazil into a major energy exporter.
Uncertainty that the offering might not come off had brought a prolonged sell-off of Petrobras shares that shaved more than US$70 billion off its market value. But the optimism displayed by investors seeking exposure to one of the world's largest oil finds in recent decades outweighed worries about growing state involvement in the company's affairs.
The record-setting stock offering had total demand of US$140 billion, with bids of US$98 billion from existing shareholders and US$42 billion from institutional investors, a source with knowledge of the transaction said. Sovereign wealth funds from the Middle East and Asia were among the investors buying into the offering, the source said on condition of anonymity.
Petrobras preferred shares, the company's most widely traded class of stock, rose 3.2 percent to 26.80 reais, outpacing a 0.7 percent rise by the Brazil's benchmark Bovespa stock index. That was the shares' largest single-day gain since September 3.
The Rio de Janeiro-based company sold 1.87 billion new preferred shares at 26.30 reais (US$15.29) each, the company said in a regulatory filing. It sold 2.4 billion new common -- or voting -- shares at 29.65 reais each.
The cash will help fund the world's largest oil exploration plan, which aims to turn Brazil into a major energy exporter.
Uncertainty that the offering might not come off had brought a prolonged sell-off of Petrobras shares that shaved more than US$70 billion off its market value. But the optimism displayed by investors seeking exposure to one of the world's largest oil finds in recent decades outweighed worries about growing state involvement in the company's affairs.
The record-setting stock offering had total demand of US$140 billion, with bids of US$98 billion from existing shareholders and US$42 billion from institutional investors, a source with knowledge of the transaction said. Sovereign wealth funds from the Middle East and Asia were among the investors buying into the offering, the source said on condition of anonymity.
Petrobras preferred shares, the company's most widely traded class of stock, rose 3.2 percent to 26.80 reais, outpacing a 0.7 percent rise by the Brazil's benchmark Bovespa stock index. That was the shares' largest single-day gain since September 3.
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