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Brazil’s oil giant Petrobras launches biggest share sale in history

Sao Paulo, Sep 24 (DPA) Brazilian oil giant Petrobras is set to launch the world’s biggest market capitalization, with a planned sale of new shares worth almost 120.3 billion reais ($70 billion).

The state-run company set a price of 26.30 reais for preferred shares and 29.65 reais for ordinary stock late Thursday, paving the way for the sale.

Trading was due to begin Friday in New York, and in Brazil itself Monday.

Brazilian President Luiz Inacio Lula da Silva said Thursday the move marked the ‘biggest capitalisation by a company in the history of capitalism’.

He had previously described the discovery of large-scale oil resources off the Brazilian coast as a ‘gift of God’ which signified the second independence of the country.

The Brazilian government, which already holds the majority of voting rights in the company, is the biggest beneficiary of the capital increase, as it is set to increase its current 40 percent stake in Petrobras.

In an exchange deal, the state will receive shares worth $43 billion in exchange for the rights to the off-shore production of five billion barrels of oil.

Petrobras plans to invest up to $224 billion of the newly raised capital to explore oil reserves off the Brazilian coast. However, the exploration is expected to be technologically difficult as the oil fields are located at a depth of up to 7,000 metres and below heavy layers of salt.

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