Petrobras could seek other ways to raise funds-exec

SAO PAULO, May 1 (BestGrowthStock) – Brazilian state-run energy
firm Petrobras (PETR4.SA: )(PBR.N: ) will seek other ways to raise
capital if congress turns down plans for the government to pump
billions of dollars into the company, a newspaper reported.

Under the plan, the company would get rights to develop 5
billion barrels of oil in exchange for shares. The oil would
come from massive subsalt resources discovered in 2007 several
miles under the sea floor off Brazil’s southeastern coast.

“If, in spite of our bet that it will, this approval
doesn’t materialize, we will have to capitalize in another
way,” the Estado de Sao Paulo newspaper quoted Petrobras
Finance Director Almir Barbassa as saying.

Barbassa said he expected approval by the end of the
month.

The funding would bolster Petrobras’s balance sheet as it
gears up to develop massive deepwater reserves.

The company has ruled out new borrowing because it would
increase debt. It has proposed that the capitalization be
performed through a rights issue of shares.

Petrobras said late on Friday it would propose that the
company and the government negotiate a preliminary value for
barrels of oil as part of the capitalization plan.

The valuation of the oil has become a contentious issue,
particularly as time runs out for the government to act before
the general elections in October.

For details of the capitalization plan please click on
[ID:nN15306577].

Stock Report

(Reporting by Eduardo Simoes; Writing by Peter Murphy;
Editing by Ted Kerr)

Petrobras could seek other ways to raise funds-exec