Petrobras (PBR) Stock Gains on $5.2 Billion Sale of Natural Gas Unit Stake - TheStreet

NEW YORK (TheStreet) -- Shares of Petrobras (PBR) - Get Report were higher in pre-market trading on Friday after the company said it would sell a 90% stake in Nova Transportadora do Sudeste, its natural gas unit, for $5.2 billion to a consortium headed by Brookfield Infrastructure (BIP).

The buyers consist of Brookfield Infrastructure, a Bermuda-based infrastructure company and institutional clients of Canada's Brookfield Asset Management (BAM) including CIC Capital and GIC Private.

Brookfield Infrastructure will fund a minimum of 20% of the deal, worth about $825 million. The remainder will be owned by the institutional partners.

Nova Transportadora do Sudesta is a pipeline system transporting natural gas in Brazil's industrialized states to the south-central region of the country.

Earlier this week, Petrobras introduced aggressive cost-cutting initiatives in an effort to reduce its roughly $123.92 billion in debt.

The Brazilian oil and gas company is looking to reach a goal of $15.1 billion in divestments for the 2015 to 2016 period. Petrobras hopes to sell an additional $19.5 billion in assets in 2017 and 2018.

Separately TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings rated this stock as a "sell" with a ratings score of D+.

The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.

You can view the full analysis from the report here: PBR

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