The sale to a consortium led by Brookfield is part of the company’s plans to focus on the exploration of petroleum and natural gas.
Brazilian oil giant Petrobras announced on Friday that its Board of Directors have approved the sale of ninety percent of Nova Transportadora do Sudeste (NTS) pipeline to a consortium led by Brookfield for US$5.19 billion.
“This transaction is significant for the Petrobras Divestment Plan,” stated the press release on Petrobras’ website. “It corresponds to roughly 35 percent of the US$15.1 billion target for the 2015-2016 period.”
According to Petrobras officials, 84 percent of the value of the sale (US$4.34 billion) will be paid to the company when the contract is signed and the remaining amount (US$850 million) in five years’ time. The natural gas pipeline passes through Brazil’s most populated and industrialized states, including Rio de Janeiro, São Paulo and Minas Gerais.
“We are very pleased to be significantly expanding our utilities business in a sector and geography that we know well and that we believe will offer opportunities to deploy further capital at attractive risk-adjusted returns,” said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure on the company’s webpage, adding “This is a unique opportunity to invest in a large-scale, high quality utility business and participate over time in Brazil’s growing gas industry.”
The sale of NTS is in line with the Brazilian company’s plans to focus on the exploration of petroleum and natural gas and sell off assets that are of no economic interest to the company. In July, Petrobras announced the sale of its Chilean fuel distribution company, PCD, to private equity firm Southern Cross Group for more than US$460 million. The NST sale is the largest asset sale by Petrobras since the company announced its divestment plan.
Brookfield is one of the world’s largest asset managers, with extensive experience in energy and infrastructure assets and with a portfolio that includes companies in the US, Canada, and Australia.