Petroleo Brasileiro SA Petrobras (ADR)(NYSE:PBR) reported that it will add $2 billion of capital into its Brazilian fuel distribution unit, so as to clean up its balance sheet and attract investors to an Initial Public Offering of the company’s Distribuidora segment that has been delayed since 2015.

The updates

Petróleo Brasileiro has released additional information on numerous fields in northeast Brazil to prospective bidders. The company is selling the rights to 3 groups of onshore fields in Bahia and Rio Grande do Norte, which resulted in a combined output of 20.4 thousand barrels a day of natural gas and oil in 2016.

The company also reported that it will intend to release the IPO of fuel distribution segment BR Distribuidora SA by December after having solved a debt issue that afflicted the firm for years. Petrobras has agreed to inject $2 billion into BR Distribuidora. The capital injection solves the key obstacle to the BR Distribuidora IPO, as the burden of invoice receipts were hurting potential valuations. Petroleo Brasileiro board has already finalized a roster of banks to achieve the IPO deadline.

The IPO of BR Distribuidora has been obstructed time and again since it was first proposed in 2015. Petroleo revived the plan this year to cut capital spending and debt in low-return activities. Pertaining the debt that Centrais Elétricas Brasileiras SA has with Petrobras, the firm is contemplating on the debt’s receivables into stocks that could be offered to investors. Brazilian firms often repackage such type of resources, from contract receivables to property, into notes that are identical to asset-backed securities and are termed locally as FIDCs. The capital injection is subject to nod by shareholders and other stakeholders.

In an unrelated news, Petróleo Brasileiro reported that it has temporarily suspended its chief compliance officer after a government ethics committee verdict that his decision to engage an auditing company where his daughter worked showed a conflict of interest.

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