:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/X6VIWJXLZJHW7B4VDNJ2IJOZYM.jpg "Smoke rises from the Braskem SA petrochemical plant in Duque de Caxias, Brazil.")
Bloomberg — One of Brazil’s most anticipated equity offerings of the year fell apart at the last minute late Thursday as the controlling shareholders of Braskem SA, who were selling part of their stakes, couldn’t agree on a price with investors for the 7.2 billion reais ($1.3 billion) transaction.
Petroleo Brasileiro SA and Novonor SA decided to withdraw their offer to offload shares in the petrochemical producer due to “inadequate demand and price levels,” according to a regulatory filing, confirming an earlier Bloomberg News report.
Amid worsening market conditions, price talks with investors had hovered around 40 reais per share, a sharp discount to Thursday’s closing price of 46.51 reais, according to people familiar with the matter, who asked not to be identified discussing confidential information. The controllers were seeking to sell as many as 154,886,547 preferred Braskem shares.
:quality(75)/cloudfront-us-east-1.images.arcpublishing.com/bloomberglinea/EKSEUL35ZZBVJEBORZKCLKXZI4.png "Braskem is down 19% this year after ranking among Ibovespa's leaders last year")
Braskem declined to comment.
Novonor -- the conglomerate previously known as Odebrecht -- has been struggling to recover from the Carwash corruption probe. The firm had said it would use part of the proceeds to pay debt with creditors Banco Bradesco SA, Itau Unibanco Holding SA and Banco Santander SA’s Brazil unit. For Petrobras, the sale would be another breakthrough in its strategy of divesting from non-core assets to focus on the pre-salt region in Brazil’s deep waters.
Braskem is down about 19% this year after a 145% jump in 2021 that made it the second-best performer on Brazil’s main stock gauge. The Sao Paulo-based firm also has operations in the U.S., Europe and Mexico.
Morgan Stanley, JPMorgan Chase & Co., Bradesco, Itau, Citigroup Inc., UBS BB Investment Bank, Banco BTG Pactual SA and Santander were handling the transaction.
Investment bankers are predicting a drop in equity offerings this year after a strong 2021 due to rising interest rates and anxiety over October elections damping investor appetite. The Braskem share sale was expected to be one of Brazil’s biggest this year.
