The Brazilian Secretary of Privatisation is considering the privatisation of one or several subsidiaries of state-run oil and gas company Petrobras as the newly elected government is pushing for major state-owned firms to sell US$20bn in assets. An entire privatisation of Petrobras is ruled out but the sale of non-core assets is considered to help the company reduce its massive net debt of US$73bn. Over the 2016-2018 period, Petrobras divested assets worth US$20bn and could sell another US$20bn worth of assets through 2019.
Besides, the government also plans to privatise the state-run power company Centrais Eletricas Brasileiras, a subsidiary of Eletrobras, by selling additional shares on the market to raise capital. According to the Secretary of Privatisation, the government does not have enough resources to capitalise the company and in particular its power generation and transmission assets, which are viewed as capital-intensive.
The government is also considering shutting down Brazilian development bank BNDES’s investment arm. The main driver behind this move is the reduction of the Brazilian public debt, which is now equivalent to about 77% of the gross domestic product (GDP). The proposed privatisations would help the government to raise up to BRL800bn (US$215bn).