Petrobras Plans Summer Equity; DCM Waits

Petrobras hopes to complete a $15bn-$25bn equity follow-on by the end of July, its CFO Almir Barbassa says. It will wait until the second half to consider going to the DCM, he adds. After being passed by Brazil’s lower house, Barbassa says he expects senate approval of legislation permitting equity issuance by May, with the sale coming 60-90 days after it becomes law. Size of the capitalization will depend on several factors, most importantly the price of crude, but the forecast is for $15bn-$25bn to be placed with minority shareholders. “We are working with no other possibility – there is no reason to believe its not going to be approved,” he says at an investor presentation in New York hosted by the Brazilian-American Chamber of Commerce. As the Brazilian oil giant focuses on the equity raise, Barbassa adds that he does not foresee Petrobras coming to debt capital markets in the first half of 2010. He declines to comment on the possibility of additional funding from the China Development Bank, following a recent trip to China. The CFO says he was there only to speak with potential contractors and service providers. The Chinese state bank lent $10bn to Petrobras last year and market rumors suggest another facility is in the works.