Petrobras in talks with Alpek on sale of its petrochem units

The Brazilian state-run oil company Petrobras to sell its petrochemicals units PetroquimicaSuape and Citepe in the north-eastern state of Pernambuco, for which they are in talks with the Mexican group Alpek SA de CV a chemical manufacturing company, who is expected to offer up to $700 million.

The Brazilian company and Alpek will negotiate the deal for 60 days.

Petrobras’ petrochemical units have accumulated 5.6 billion reais ($1.7 billion) in losses over the last two years, which included impairment charges related to the largest-ever corruption probe in Brazil.

The plants in Pernambuco produce PTA, raw material for PET resin, and polyester fiber. The sale will reduce Petrobras’ debt, as well as the need to inject more cash into the plants, which have not been profitable yet, the source added.

Beyond the sale of its petrochemical assets in Pernambuco, Petrobras has tried to sell its 36% stake in Latin America’s largest petrochemical company, Braskem SA. The deal has stalled as investors fret about the involvement of Grupo Odebrecht SA, Braskem’s controlling shareholder, in the Car Wash probe.

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