ECONOMY – With sale of assets, Vale and Petrobrás are featured

Among the companies that reduced the net debt between June 2016 and June of this year, two Brazilian giants – Vale and Petrobrás – stand out. Pressured by a high degree of leverage, both have been divesting assets to generate cash and relieve debt. The result of this movement was a retraction of 11.15% in the net debt of the oil company and of 17.5% in that of the mining company, according to data from Economática. Petrobras, for example, sold its stake in the Carcará field in the Santos Basin pre-salt to the Norwegian Statoil for $ 2.5 billion. At the end of June, the Brazilian company amounted to R $ 295.3 billion in debt. At Vale, one of the largest operations was the sale of fertilizer assets to Mosaic for – also – $ 2.5 billion.

The company, which ended the second quarter of this year with $ 22.1 billion of net debt, plans to continue divesting in the coming months in an attempt to reach the debt target of $ 15 billion to $ 17 billion. According to the director of treasury and corporate finance of Vale, Sonia Zagury, in addition to the commercialization of assets, an improvement in the market and the end of a cycle of large investments also favored the company’s cash situation and, consequently, the net debt . “The improvement in China’s situation and ore prices has helped speed the debt reduction,” Sonia told the State via e-mail.

Unlike Vale, most Brazilian companies have not relied on the help of external factors to leverage cash and reduce debt. According to Renato Carvalho Franco, Íntegra’s partner in corporate restructuring, the reduction of companies’ liabilities has come from the sale of assets, the curb on investments to keep capital in cash and cut costs. “The ideal to reduce debt is to generate cash, but companies are not getting it. They have reduced investments to pay banks. “

The general director of business restructuring Alvarez & Marsal in Brazil, Marcelo Gomes, also believes that only cash generation can definitely improve companies’ debt levels. “For this, the economy needs to start recovering, but we’ve started this process already.” Factors such as falling inflation and falling interest also begin to help companies. “But their impact is slow.” Attempted, Petrobrás did not return the interview requests. The information is from the newspaper O Estado de S. Paulo.

Source: Isto É