Brazil Petrobras mulls ferts, hydrogen projects with Unigel, who hires financial advisor

BUENOS AIRES (ICIS)–Petrobras and Brazil’s petrochemicals producer Unigel are to analyse joint businesses in fertilizers, green hydrogen and low-carbon projects, the Brazilian energy major said on Tuesday.

Meanwhile, Unigel said earlier this week it had hired Moelis & Company as a financial advisor to support it “in the analysis of financial strategies, aiming, among others, to improve” its capital structure.

The news comes after Unigel was downgraded in May by the two US credit rating agencies rating its debt obligations after its first-quarter financial results showed a “sharp, simultaneous” downturn in both its petrochemicals and fertilizers operations.

PETROBRAS DEAL
Petrobras and Unigel have signed a two-year, non-binding agreement to explore joint businesses.

“Only after the conclusion of technical analyses by a multidisciplinary group will any projects arising from the agreement have official estimates of cost and return, necessary for future consideration by internal approval bodies, in accordance with the company’s governance,” said Petrobras on Tuesday.

Meanwhile, Unigel also said on Tuesday the agreement was in line with its purpose of focusing on investments that would allow it to increase the decarbonisation of its operations.

In 2022, Unigel said it was to build a green hydrogen and green ammonia plant, although S&P – one of the credit rating agencies which downgraded the company in May – said that project could be delayed due to the company’s financial issues.

Brazil’s financial daily Valor reported earlier this week that Unigel would also be mulling filing a judicial recovery procedure, but Unigel on Tuesday denied that news.

“Regarding the hiring of the Felsberg Advogados law firm, also mentioned in the news, the company clarifies that it has relied on the support of this firm for more than a decade, in various projects, in several areas of law,” said Unigel.

“As for the information conveyed that banks would be concerned about a possible filing of a judicial recovery procedure, the company clarifies that it does not envision such a possibility.”