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04/11
Braskem May Sell Stock to Fund Future Investments, CEO Says
p class=”partner”> By Lucia Kassai
(Updates with CEO’s comments in third paragraph, Mexico project in fifth paragraph.)
Feb. 22 (Bloomberg) — Braskem SA, Latin America’s largest petrochemicals producer, said it may sell shares as it seeks to boost output in the region. The company’s stock fell the most in three months.
Bonds and loans are also among the alternatives Braskem is considering to finance future spending plans, Chief Executive Officer Carlos Fadigas said today at a press conference in Sao Paulo. A possible offering probably wouldn’t occur within the next 12 months, he said.
“We don’t rule out a share sale in the coming future to fund the new cycle of investments of the petrochemicals sector,” Fadigas told reporters. “We may decide on funding sources between 2012 and 2016,” he said in an interview after the event.
The Sao Paulo-based company is weighing investments in Peru and Venezuela, while demand for resins in Brazil is expected to climb 10 percent this year, Fadigas said.
Braskem and Grupo Idesa SA said in February 2010 that they signed a supply contract with Petroleos Mexicanos, Latin American’s biggest oil producer, as part of a plan to build a $2.5 billion petrochemical complex in Mexico. Under the agreement, Pemex will supply ethane for the plants, which may start by 2015 and produce 1 million metric tons a year of ethylene and polyethylene, Braskem said at the time.
Braskem fell 44 centavos, or 2.2 percent, to 19.35 in Sao Paulo trading at 10:57 a.m. New York time. Earlier, it declined as much as 5.3 percent, the largest drop since Nov. 23. Before today, the stock had surged 47 percent in the past year, while Brazil’s benchmark Bovespa index was little changed over the same period.
–Editors: Jessica Brice, Robin Saponar
To contact the reporter on this story: Lucia Kassai in Sao Paulo at lkassai@bloomberg.net
To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net