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Petrobras (PBR) and Total Sign Asset Sale Deal Worth $2.2B
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Brazil's state-run energy giant Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) recently entered into an agreement with France’s Total SA to divest assets worth $2.2 billion. The divestment includes stakes in oilfields and two thermal power stations.
Per the agreement, Petrobras will receive cash of $1.6 billion post the closure of the deal. The remaining amount will be received over the length of the partnership with Total. Moreover, the agreement gives Petrobras an option to buy a stake in a Gulf of Mexico field owned by Total and Exxon Mobil Corp. (XOM - Free Report) .
The divestment plan is in sync with Petrobras’ efforts to lower its huge debt burden. In fact, the company is the most indebted in the world with a debt of $122.65 billion at the end of third-quarter 2016. As a result, Petrobras intends to divest assets worth as much as $15.1 billion over 2015–2016 and another $19.5 billion over 2017–2018. Through these initiatives, the company expects to achieve a net debt-to-EBITDA ratio of 2.5 times in 2018 as against 5.3 times at year-end 2015.
Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. The company’s involvement in the multibillion-dollar money laundering and bribery case has not only hurt its goodwill but also put its credit rating at risk, making it difficult for the firm to find creditors.
Year to date, the Zacks categorized U.S. Oil and Gas Emerging Markets Integrated industry has registered an impressive growth of 61.91%. However, shares of Petrobras have outperformed the industry by registering growth of 143.02%.
Petrobras currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
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Petrobras (PBR) and Total Sign Asset Sale Deal Worth $2.2B
Brazil's state-run energy giant Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) recently entered into an agreement with France’s Total SA to divest assets worth $2.2 billion. The divestment includes stakes in oilfields and two thermal power stations.
Per the agreement, Petrobras will receive cash of $1.6 billion post the closure of the deal. The remaining amount will be received over the length of the partnership with Total. Moreover, the agreement gives Petrobras an option to buy a stake in a Gulf of Mexico field owned by Total and Exxon Mobil Corp. (XOM - Free Report) .
The divestment plan is in sync with Petrobras’ efforts to lower its huge debt burden. In fact, the company is the most indebted in the world with a debt of $122.65 billion at the end of third-quarter 2016. As a result, Petrobras intends to divest assets worth as much as $15.1 billion over 2015–2016 and another $19.5 billion over 2017–2018. Through these initiatives, the company expects to achieve a net debt-to-EBITDA ratio of 2.5 times in 2018 as against 5.3 times at year-end 2015.
Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. The company’s involvement in the multibillion-dollar money laundering and bribery case has not only hurt its goodwill but also put its credit rating at risk, making it difficult for the firm to find creditors.
Year to date, the Zacks categorized U.S. Oil and Gas Emerging Markets Integrated industry has registered an impressive growth of 61.91%. However, shares of Petrobras have outperformed the industry by registering growth of 143.02%.
Petrobras currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
A better-ranked player from the broader energy sector is Braskem S.A. (BAK - Free Report) . The stock sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>