Brazilian state-run oil giant Petrobras said today its board approved an increase in its capital base, a necessary step for a massive share offering to help fund a $220 billion four-year investment plan.
The company may issue up to 2.4 billion preferred shares, compared with 200 million previously, and 3.2 billion voting shares, according to the new limits set by the board. Petrobras' statute barred the company from issuing voting shares before.
The new limits on share issuance will go to a general shareholders vote on 22 June.
Petrobras suffered several recommendation downgrades by stock analysts in recent weeks over uncertainty created by a government-backed oil-for-shares capital plan that the company says could bring in $25 billion in new cash to fund exploration of the vast pre-salt fairway.
The company said the board approval of new issuance limits doesn't mean it plans to sell the entire amount of stock at once as it still needs congressional approval for the oil-for-shares plan.
Petrobras most-traded preferred shares firmed 0.4% to 27.53 reais in early morning trade today, while the voting shares were up 1% to 31.37 reais, compared with a 1.6% jump in the benchmark Bovespa index, a Reuters report said.
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