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Brazil Suspends $5.2b Sale of Petrobras Unit

Brazil Suspends $5.2b Sale of Petrobras UnitBrazil Suspends $5.2b Sale of Petrobras Unit

A Brazilian federal court suspended on Friday the $5.2 billion sale of state-controlled Petroleo Brasileiro SA's natural gas pipeline unit to a group of investors led by Canada's Brookfield Asset Management Inc. In a document seen by Reuters, the Sergipe state-based court ruled the transaction, which was to be closed within weeks, be halted because of discrepancies in the way Petrobras proceeded with the sale, Reuters reported. Petrobras said later on Friday that it had been informed about the court's decision and that it planned to take appropriate judicial measures regarding the case, indicating it would appeal. Petrobras has been dumping assets in an effort to reduce its massive debt load that led to the loss of its investment grade rating. "They might have to come up with a different strategy and make it more transparent, which is what the courts are demanding," said Horacio Cuenca, a Rio de Janeiro-based analyst at Wood Mackenzie.

 

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