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Court halts Petrobras divestment

SAO PAULO, January 27, 2016 – A federal judge blocked the sale of Brazilian state-controlled Petrobras’ stake in a natural gas subsidiary Monday.

The USD 469 million sale of a 49% minority interest in natural gas distribution unit Gaspetro, a subsidiary of Petrobras, to Japanese conglomerate Mitsui & Co was halted on the grounds that it did not meet the transparency requirements needed under Brazil’s public tender laws. The sale was announced in October and completed in December.

 

“The time has arrived for the judiciary to define if Petrobras is following the same practices in its sale of assets [as it has in the past],” Judge João Paulo Piropo de Abreu wrote. “These being: sales without public tenders, secret negotiations, suspicion of price-fixing, with strong suspicion of illegality.”

The move comes amid the fallout of Petrobras’ huge corruption scandal, which had put the company in about USD 125 billion of debt as of Q3. The company is attempting to massively divest assets totalling USD 15 billion by the end of 2016, and an added USD 42 billion by the end of 2018.

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