Brazil’s Petrobras Gets US$ 800-Million, 10-Year Loan from 3 Japanese Banks

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Brazilian Petrobras's Revap Brazilian government controlled oil and gas multinational Petrobras announced this Friday, December 12, that it made loans from three Japanese banks, for the value of 75 billion yen (around US$ 824 million), for investment in the Henrique Lage Refinery (Revap) in São José dos Campos, in the interior of the state of São Paulo.

According to a press statement by the company, the program is being developed to increase the heavy oil processing capacity, improve the quality of diesel and gasoline and diversify the variety of products processed.

In the press statement, Petrobras informed that the financing was granted by banks Sumitomo Mitsui Banking Corporation (SMBC), Mizuho Corporate Bank (Mizuho) and the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) and the payment span is ten years.

"The financing is part of the company's program for fund collection to finance part of its investment projects with the support of traditionally-used long-term financing sources," according to the statement.

Congress Doubts

At the end of last month, the minister of Mines and Energy of Brazil, Edison Lobão, told reporters that a 2 billion Brazilian real (US$ 861 million) loan made by Petrobras from the Federal Savings Bank (CEF) was just a "regular loan" to cover operating costs.

"This is not a problem for any company. It has already been done many times. Petrobras has already made loans abroad at other moments, and in Brazil too. Petrobras is just repeating something that it has always done," stated the minister while addressing the Senate regarding infrastructure.

Brazilian senator Tasso Jereissati spoke about the loan in a plenary session in Congress. According to him, the company has "serious cash flow problems. The organization's monthly report to the Securities and Exchange Commission (SEC) shows that the loan was made on October 31 and the objective is to "strengthen the turning capital".

According to Jereissati, the conditions negotiated by Petrobras with the CEF were as follows: grace period of 180 days for payment of the loan and single amortization at the end of the event; interest rate of 104% of the CDI Over; incidence of the financial transactions tax (IOF) and amortization and full payment of the loan made.

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