Brazil's Senate panel clears way for sale of Petrobras shares

Brazil's senate panel on economic affairs on Tuesday rejected a bill that would have blocked the sale of 30% of Petroleo Brasileiro SA shares. The sale of the shares is estimated to be worth 8 billion real. The government, which owns an 82% stake in Petrobras, can now go ahead with plans to sell the shares in July. Analysts say the move might be a step towards Petrobras's privatization.


RIO DE JANEIRO�Brazil's senate panel on economic affairs on Tuesday rejected a bill that would have blocked the sale of 30% of Petroleo Brasileiro SA shares. The sale of the stake is estimated to be worth 8 billion real. The government, which owns an 82% stake in Petrobras, can now go ahead with plans to sell the shares in July. Analysts say the move might be a step towards Petrobras' privatization.

The sale will be open to domestic and foreign investors, although there are limits on the number of shares any one entity can buy, so as to control any outsider's influence over the largely state-owned firm (OGJ Online, May 9, 2000).

The panel voted 14 to 8 against the bill, proposed by Sen. Alvaro Dias. Dias opposed the sale because he feared it would be the first step toward privatization. Dias is a member of the Democratic Movement Party, the second largest party in the government's ruling coalition.

Privatization of Petrobras is barred by Brazil's constitution. The constitution could be amended, however, as it was in 1995 to end Petrobras's monopoly over most aspects of Brazil's oil industry.

A prominent oil analyst in Brazil told OGJ Online that he believes President Fernando Henrique Cardoso's administration would like to privatize Petrobras, and that the sale of the 30% stake is a way of "testing the waters" and feeling out Congress's mood.

Dias said he would appeal to the senate president to put the bill to a vote on the senate floor. Considering the government's overwhelming majority in Congress, political analysts say all signs indicate that a majority of senators will ratify the panel's decision.

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