Brazil working on Petrobras debt refinancing plan, minister says

11/12/2014 - 15:14

SAO PAULO (Reuters) - The Brazilian government is working on a plan to help state-controlled oil producer Petrobras borrow money in capital markets to help finance exploration and operational activities during next year, a cabinet minister said on Thursday.

The plan, by which the Brazilian government would guarantee a debt issuance by PETROBRAS (APBR.82)(PETR3.BR)(XPBR.MC)(APBR.82)(PETR4.83)(PETR3.BR)backed by 9 billion reais ($3.4 billion) in debt that state-controlled power utility Eletrobras owes to the oil company, Mines and Energy Minister Edison Lobão told reporters in Brasilia.

Lobão expects the deal to be concluded and announced this week.

Bankers and analysts say Petrobras, formally known as Petróleo Brasileiro SA , risks being left out of capital markets temporarily as a widening corruption probe makes it harder for the company to raise cash in debt and equity markets. The refinancing hurdles are moutning just as international oil prices are tumbling, threatening to crimp revenue.

(Reporting by Leonardo Goy; Writing by Guillermo Parra-Bernal)