© Reuters. FILE PHOTO: 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 Photograph
By Tatiana Bautzer and Rafaella Barros
SAO PAULO/RIO DE JANEIRO (Reuters) -Yara Worldwide ASA is near buying the fertilizer unit placed on sale by state-controlled oil firm Petroleo Brasileiro SA, often known as Petrobras, two sources with data of the matter stated on Friday.
Petrobras has chosen Yara’s bid and the deal now must be authorised by the corporate’s board, one of many sources stated. An announcement is anticipated over the following weeks.
Yara declined to touch upon “market rumors.” Petrobras declined to touch upon the selecting of Yara’s proposal, referring to its newest submitting in late August by which it stated the businesses might current binding proposals.
In an announcement in a while Friday, Petrobras denied imminence of a sale, including the method is within the binding section, “having not reached the stage of receiving proposals.”
Yara already owns 5 crops in Brazil and 24 mixing amenities. It additionally owns mining and port operations.
Petrobras’ fertilizer unit, often known as UFN-III, relies in Mato Grosso do Sul state, one in all Brazil’s largest grain producers.
The sources didn’t specify the deal worth, however stated it will likely be decrease than $100 million, for the reason that unit will not be but operational.
Petrobras has been attempting to promote the unit for a while. 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 on account of current adjustments in Petrobras’ board.
Brazil is extremely 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unit within the metropolis of Tres Lagoas started in 2011 and was stopped in 2014 with 81% accomplished after Petrobras rescinded a contract alleging corporations weren’t compliant.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 anticipated to supply 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 anticipated to be accomplished inside two to a few years.
Petrobras is anticipated to supply the acquirer an possibility of shopping for the unit with a 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 warfare interrupted provide and raised fertilizer costs.
