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Brazil’s Petrobras Lending Up to US$ 574 Million to Small Suppliers

Petrobras, Brazil’s state-controlled oil and gas multinational is going to offer credit to small- and medium-sized suppliers needing funds in order to meet their contractual obligations to the company. For such, the company has begun taking part in Credit Rights Investment Funds (FDICs, in the Portuguese acronym).

The aim of the initiative is to encourage greater participation of those suppliers in the development of the Brazilian oil and gas sector and of the pre-salt layer, as well as to encourage the long-term reduction of the industry’s products and services costs.

With the granting of credit, suppliers whose contracts have not been accomplished yet will have access to funds in order to do so, with the advantage that the operation is counted as an advance on future earnings, rather than as a loan, thus rendering the transaction exempt from payment of the Tax on Credit Operations.

The first round of the fund managed by the HSBC bank will total 100 million Brazilian reais (US$ 57.4 million). The intention of Petrobras is to raise that figure, in the short term, up to 1 billion reais (US$ 574 million) in net assets, in multiple series of 100 million reais each.

The company has already injected 4 million reais (US$ 2.2 million) into the fund, out of a total of 10 million reais (US$ 5.7 million) to be invested in coming months. The fund’s senior tranches were rated AA by FITCH Ratings, and is already operating.

In turn, the second fund, managed by bank Pactual and scheduled for launch this month, should total 3 billion reais (US$ 1.7 billion) in net assets and was rated AA+ by Standard & Poor’s.

Through the new funds, suppliers with CRCC registry certification from Petrobras and whose performance has a positive evaluation by the company will have their credit preapproved and may advance up to 50% of the value of their contracts with Petrobras, with more advantageous conditions and deadlines than those offered by the traditional credit market.

Companies interested in registering themselves as Petrobras suppliers should go to www.petrobras.com.br and register in the section Centro de Negócios/Canal Fornecedor (Business Center/Supplier Channel – in Portuguese only, the site’s English version is being updated and will be published soon).

The website of the Program for Mobilization of the National Oil Industry (Prominp) also offers relevant information for the companies involved in the supply chain of goods and services to the oil and natural gas sector. The address is www.prominp.com.br.

Investors interested in the FDICs, in turn, may obtain information from the financial institutions that manage the funds, or by consulting the funds’ prospectuses.

Anba
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