Brazilian petrochemical firm Braskem said on Monday that Novonor and NSP Investimentos have signed an agreement to sell control of the company to private equity fund Shine I, which is controlled by asset manager IG4 Capital.
IG4 confirmed the deal in a separate statement, adding that the transfer of shares is expected to be completed within the next 30 days, subject to required legal and regulatory approvals.
Within the same period, Shine I and state-run oil company Petrobras are expected to sign a new shareholders’ agreement governing Braskem.
As part of the process, a new board of directors is set to be elected and a new executive management team appointed, IG4 added.
Petrobras, which currently holds 47% of Braskem’s voting shares and 36.1% of its total shares, said in a statement that it is evaluating the terms of the transaction to make a final decision regarding its waiver rights.
Braskem’s shares were up 3% on Monday. The stock has risen 15% this year, as investors have reacted positively since Novonor’s sale of its controlling stake was first announced in December.
DEAL FRAMEWORK
The agreement sets out the conditions for the court-supervised sale of common shares and Class A preferred shares representing about 50.1% of Braskem’s voting shares and around 34.3% of its total shares, Braskem and IG4 said.
The contract also requires Shine I to file for the registration of a public tender offer to purchase up to all of Braskem’s outstanding common and preferred shares.
NSP, the vehicle by which Novonor has managed its stake in Braskem, will retain a 4% participation in the petrochemical firm’s total share capital.
Following the new shareholders’ agreement, Braskem’s governance will be balanced between Shine I and Petrobras.
The shareholders’ deal could be concluded this week, a source close to the talks told Reuters on Monday, adding that the election of a new board of directors and management would likely come at the shareholders’ meeting scheduled for April 29.
Two other sources said that Helcio Tokeshi, IG4’s managing director, is expected to become Braskem’s next chief executive after the meeting, while Carlos Brandao, head of operations at IG4, would likely become chief financial officer.
IG4 and Brandao declined to comment, while Tokeshi did not immediately respond to a request for comment.
New governance could help strengthen Braskem, which has grappled with tight petrochemical margins and ongoing liabilities tied to areas damaged by salt mining operations in northeastern Brazil.
The company is racing against the clock to deal with looming interest payments on its debt and is considering whether to seek an injunction to avoid a painful debt restructuring, a source told Reuters earlier this month.
Source: Reuters.com