Petrobras Approves 90% Stake Sale in NTS to Brookfield

Petrobras Board of Directors approved, in a meeting held yesterday, the sale of 90% of the shares in Nova Transportadora do Sudeste (NTS) to Brookfield Infrastructure Partners (BIP) and its affiliates, through a Private Equity Investment Fund (FIP) that has other shareholders including British Columbia Investment Management Corporation (BCIMC), CIC Capital Corporation (wholly-owned subsidiary of China Investment Corporation - CIC) and GIC Private Limited (GIC).

The sale amounted to US$5.19 billion. The first installment corresponds to 84% of the total amount (US$4.34 billion), to be paid when the transaction has been completed, and the remaining amount (US$850 million) in five years’ time.

NTS was sold through a competitive process and the transaction price was appraised by four financial institutions, through three fairness opinions for the fair value and one valuation report. This transaction is significant for the Petrobras Divestment Plan. It corresponds to roughly 35% of the US$15.1 billion target for the period 2015 - 2016.

NTS was set up under an Agreement signed with the National Agency of Petroleum, Natural Gas and Biofuels - ANP, in which Petrobras was committed to restructuring its wholly-owned subsidiary Transportadora Associada de Gás (TAG) in order to create one gas transportation company in the Southeast of Brazil (NTS) and another in the North and Northeast (TAG).

Brookfield is one of the world's largest asset managers, with more than US$200 billion under its management, and it has an extensive experience in energy and infrastructure assets with a portfolio that includes companies with over 14,000 kilometers of pipelines in the US, Canada and Australia.

This transaction opens opportunities for partnerships with other companies that have extensive experience and investment conditions, contributing to strengthen the natural gas industry in Brazil. It also fosters new investments to expand the gas transportation infrastructure, aiming to create a model of deverticalization of the natural gas chain, as required by the regulatory body (ANP), stimulating the development of a competitive environment, favorable to new players entering and sharing infrastructure costs.

The completion of the transaction is subject to the approval of Petrobras at a General Shareholders’ Meeting and to certain customary conditions, including the approval by the regulatory bodies.