A person walks in entrance of the headquarters of Petroleo Brasileiro S.A. (Petrobas) in Rio de Janeiro, Brazil March 9, 2020. REUTERS/Sergio Moraes/File Picture
SAO PAULO/RIO DE JANEIRO, Sept 9 (Reuters) – Yara Worldwide ASA (YAR.OL) is near buying the fertilizer unit placed on sale by state-controlled oil firm Petroleo Brasileiro SA, referred to as Petrobras, two sources with information of the matter mentioned on Friday.
Petrobras has chosen Yara’s bid and the deal now must be accredited by the corporate’s board, one of many sources added. An announcement is predicted over the following weeks.
Yara declined to touch upon “market rumors.” Petrobras declined to touch upon the selecting of Yara proposal, referring to its newest submitting despatched late August wherein it says the businesses may current binding proposals.
Yara already owns 5 vegetation in Brazil and 24 mixing amenities. It additionally owns mining and port operations.
Petrobras’ fertilizer unit, referred to as UFN-III, relies in Mato Grosso do Sul state, one among Brazil’s largest grain producers.
The sources didn’t specify the deal worth, however mentioned it will likely be decrease than $100 million, because the unit just isn’t but operational.
Petrobras has been making an attempt to promote the unit for some time. In February it agreed to promote it to Russian group Acron, however the deal collapsed. In Might, the oil firm relaunched the method with advisory of the funding banking unit of Banco Bradesco SA.
Different corporations within the deal included Brazilian group Unigel and steelmaker CSN. The ultimate deal announcement has been delayed resulting from current modifications in Petrobras’ board.
Brazil is very depending on fertilizer imports. Building of the fertilizer unit within the metropolis of Tres Lagoas started in 2011 and was stopped in 2014 with 81% accomplished after Petrobras rescinded a contract alleging corporations weren’t compliant.
When operational, the unit is predicted to provide 2,200 tonnes of ammonia and three,600 tonnes of urea each day, round 20% of the urea consumption within the nation. The unit is predicted to be accomplished inside two to 3 years.
Petrobras is predicted to supply the acquirer an possibility of shopping for the unit with a pure fuel provide contract. The state-controlled firm had a bigger fertilizer enterprise, however started divesting in 2018. Curiosity for fertilizer companies has risen after the Ukraine struggle interrupted provide and raised fertilizer costs.
Reporting by Tatiana Bautzer and Rafaella Barros; Modifying by Josie Kao
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