SAO PAULO, April 27 (Reuters) - Brazil’s state-controlled oil company Petroleo Brasileiro SA is close to deciding the next phase in the hotly contested sale of its gas pipeline network TAG, four sources with knowledge of the matter said on Friday.
Petrobras, as the company is known, will likely decide by Monday whether to call a second round with the highest bidders, or enter exclusive talks with the single highest bidder, the sources said. A May 7 board meeting will approve the decision taken by management committees in the coming days.
Petrobras declined to comment.
Three groups, led by Australia’s Macquarie Bank Ltd, sovereign wealth fund Mubadala Development Co and France’s Engie SA delivered their binding offers, which included financing commitments and proposals for contracts, on April 19.
According to the rules set forth by Brazil’s federal audit court, a second round is mandatory if the bids are within 10 percent of each other. A second round is also required if Petrobras, after chosing to negotiate just with one bidder, agrees to any change in the acquisition contract that involves a financial impact.
Petrobras asked the bids to value TAG based on last December’s financial statements, but with a provision to adjust bids by an interest rate equivalent to Brazil’s interbank rate plus 3 percent until the date of the closing.
All of the bids were highly leveraged, according to sources.
The Macquarie group includes the Canada Private Pension Investment Board, known as CPPIB, sovereign wealth fund GIC Pte and Brazilian holding companies Itaúsa Investimentos SA and Cambuhy Investimentos SA.
Bank of America Corp and Banco Bradesco SA are advising the Macquarie group on the financing, and it was expected to back its bid with around 60 percent in debt, according to sources with knowledge of the matter.
Mubadala and EIG Global Energy Partners formed a group that was joined by Italy’s Snam SpA as a shareholder and the gas pipeline operator. The group is in talks with King Street Capital Management and Farallon Capital Management to join it, according to sources. The funds did not immediately comment on the matter.
Goldman Sachs & Co is providing the financing to the Mubadala group and people with knowledge of the matter say up to 80 percent of the bid may be financed.
Engie is said to be in talks with Canadian pension fund Caisse de Depot et placement du Quebec as a potential partner, according to one of the sources.
$1 = 3.50 reais Additional reporting by Steven Jewkes in Milan; Editing by Tom Brown