Petrobras raises $70bn in record share offering

 
City A.M. Reporter
Brazilian state oil company Petrobras raised $70bn (£44bn) on Thursday in the world's biggest share offering, giving the company the financial muscle it needs to tap vast offshore oil reserves.

The cash will help fund the world's largest oil exploration plan, which at $224bn for the 2010-2014 period aims to turn Brazil into a major energy exporter.

The Rio de Janeiro-based company sold 1.87 billion new preferred shares at 26.30 reais each, the company said in a regulatory filing. It sold 2.4 billion new common – or voting – shares at 29.65 reais each.

Uncertainty that the offering might not come off had brought a prolonged sell-off of Petrobras shares that shaved more than $70 billion off its market value. But the optimism displayed by investors seeking exposure to one of the world's largest oil finds in recent decades outweighed worries about growing state involvement in the company's affairs.

"The deal priced at a very tight discount, which is comforting to know because the market expected it to price lower," said Marcio Macedo, who manages about $40 million of stocks for Sao Paulo-based Humaita Investimentos. "After this very successful deal, markets will be in a good tone tomorrow."