Engie tells Brazil court it raised $3 billion for suspended deal

May 29, 2019

By Ricardo Brito

BRASILIA (Reuters) – Engie Brasil Energia informed Brazil’s Supreme Court that it had already raised $3 billion abroad to buy Petrobras’ TAG pipeline unit when the top court suspended the $8.6 billion acquisition last week, according to a document seen by Reuters on Wednesday.

A consortium led by the subsidiary of French gas and power group Engie had already closed the purchase of Transportadora Associada de Gás, or TAG, from state-run oil company Petroleo Brasileiro SA in April and received approval from Brazil’s antitrust regulator for the deal.

Engie told the court its decision had “created a situation of extreme juridical insecurity” because it had already begun an operation involving “significantly” costly financial resources to buy a 90% stake in TAG.

Supreme Court judge Edson Fachin issued an injunction on Friday suspending some major divestments by Petrobras at the request of an oil workers union.

The full court will debate the injunction on Thursday.

Under the deal agreed with Petrobras, the oil company would retain a 10% stake in TAG, which operates 4,500 kilometers (2,800 miles) of gas pipelines. Engie and its subsidiary will control 58.5% and Quebec pension fund CDPQ will hold 31.5%.

(Reporting by Ricardo Brito; Writing by Anthony Boadle; Editing by Phil Berlowitz)

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