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Report: Caixa's sale of Petrobras stake could generate more than 1B reais profit

Caixa Econômica Federal could generate a profit of more than 1 billion Brazilian reais through the sale of its stake in state-run oil company Petróleo Brasileiro SA - Petrobras, Valor Econômico reported.

The bank plans to conduct the sale in early May, according to the report.

Reuters reported earlier that proceeds from the sale of Caixa's 2.3% Petrobras stake, which is valued at roughly 9 billion reais, will be used to pay off 40 billion reais in convertible bonds sold to Brazil's government.

Caixa is in the process of divesting its stakes in several companies as part of a government initiative to eliminate cross-shareholdings of state-run entities. The bank plans to launch IPOs for four of its subsidiaries, including its insurance unit, over the next 18 months. The company hopes to garner 15 billion reais from the offerings.

Caixa CEO Pedro Guimaraes recently said the bank is reaching out to investors in an attempt to sell off distressed real estate assets, consisting mostly of defaulted mortgages. The bank divested its entire 8.864% stake in reinsurer IRB-Brasil Resseguros SA earlier in March.

As of March 21, US$1 was equivalent to 3.83 Brazilian reais.