RIO DE JANEIRO (Reuters) - Brazil’s state-run oil company Petroleo Brasileiro SA (PETR4.SA) said on Tuesday its fuel distribution unit BR Distribuidora swung to a profit in the first nine months of the year, allaying investor concerns ahead of its initial public offering.
A prospectus filed with Brazil’s securities industry regulator on Tuesday showed the distribution unit posted net income of 620 million reais ($196.36 million) in the first nine months of the year, compared to a 367 million loss in the same period in 2016.
BR Distribuidora also told investors in the filing that it plans to expand its network of gasoline stations, which is already Brazil’s largest, and exit non-core businesses.
The unit, which is also Brazil’s biggest lubricant distributor, plans to boost production capacity at its Duque de Caxias lubricant factory by 55 percent in two years to 42,000 cubic meters per month, the document showed.
After a series of interruptions in the past two years, Petrobras revived IPO plans for BR Distribuidora earlier this year, in a bid to cut debt and capital spending in low-return activities.
On Monday, Petrobras asked for the regulator’s approval for the IPO, after injecting 6.3 billion reais into it to entice investors wary of the distributor’s hefty debts.
In the initial public offering, Petrobras will sell a stake of at least 25 percent in BR Distribuidora.
($1 = 3.1575 reais)
Reporting by Marta Nogueira; Writing by Alexandra Alper; Editing by Sandra Maler