Guedes defends selling Petrobras shares and using money to fight poverty – 10/13/2021 – Market

Economy Minister Paulo Guedes said that selling Petrobras shares and using the gain to fund social programs could be an alternative for the complete privatization of the company.

“When fuel prices rise, the most fragile are struggling. So imagine if I sell some of Petrobras’ shares and give them these resources? It doesn’t make sense for the country to get richer and the poor to get poorer,” he said Guedes, in conversation with journalists in Washington this Wednesday (13th).

The minister traveled to the US capital to participate in the annual meeting of the IMF and other events, such as a meeting of economy ministers of the G20.

Guedes’ answer came after questioning the speech of the president of the Chamber of Deputies, Arthur Lira, who questioned Petrobras’ management. In an interview with CNN Radio this Wednesday, Lira stated that the state-owned company only chooses the paths to “perform and distribute” dividends to shareholders.

“Are we going to take Petrobras to the new market? Today the government controls Petrobras with common shares. If you say that it is going to the new market, the calculations are that Petrobras can win between [R$] 100 [bilhões] and [R$] 150 billion additional value,” he said.

The new market is the segment of the Stock Exchange for companies with good corporate governance practices. In this segment, companies operate only with common shares, which give voting rights. Usually companies have both common and preferred shares, without voting rights.

Guedes also said that if the price of oil is going up, Petrobras also goes up in value. “And it can go even higher if I say I’m going to privatize, give up control,” he said. He defended the creation of a corporation, “the same idea used at Eletrobras”, which needed to be capitalized.

“In the case of Petrobras, it [a ação] can go up because you go to the new market. This difference between [ações] common and preferred. So the government, which currently has control, can continue with the golden share, anything like that, but when the shares are all of the same quality, the market will apply a multiple of a private company, and it will be worth much more “, evaluates the minister.

“Then, every time the fuel goes up, you have Petrobras shares worth more, you sell a little bit and let the poorest people buy natural gas. Then when gas and oil prices go up, a part of this wealth that Brazil has goes to the poorest,” he added.

Guedes stressed that he defends the privatization of all state-owned companies, including Petrobras, and that this money be used to transfer wealth to the poorest. “Popular Capitalism, by Margaret Thatcher”.

The minister also suggested the idea of ​​creating a fund to fight poverty based on profits from shares of state-owned companies such as Petrobras and Caixa Seguridade.

In the conversation, the minister also commented that Brazil’s adhesion to the international agreement to create a minimum tax for large corporations can help the country in the process of entry into the OECD (Organization for Cooperation for Economic Development), one of the goals of the Brazilian government.

Guedes met this Wednesday with the organisation’s secretary general, Mathias Cormann. “Of the 247 questions [para entrada na OCDE], Brazil has already attended 100 and we have already asked for the recognition of another 60. In other words: 160, we would be ahead of practically all the other candidates”, he said.

The proposal for a global minimum tax for multinationals was preliminary approved by the G20 in July. On Friday (8), the OECD (Organization for Economic Cooperation and Development) announced an agreement bringing together 136 countries —including Brazil— around the proposal. Pakistan, Sri Lanka, Kenya and Nigeria did not agree to join.

Under the new agreement, which has yet to be signed, a minimum rate of 15% will be applied to multinationals with annual sales above 20 billion euros (R$ 128 billion) and a profit margin above 10%. The OECD expects that this will generate annual revenues of US$ 150 billion (R$ 830 billion), and that the measure will take effect in 2023.

Guedes assesses that the measure could bring more resources to Brazilian public coffers, but he did not estimate a figure. He said that the policy could also encourage Brazil to reduce its tariffs on large companies. “Business taxes have been going down for 40 years in the world. They were around 40.45%, they were going down, and they are on average [nos países] around 23.5% in the OECD, and Brazil has 34%. In our reform, we pull it to 26%. And we are heading towards the global downward movement in the corporate tax. This brings us closer to the first world.”

The minister also stated that Brazil is preparing a package of environmental measures to be announced at COP-26, a global conference on climate change scheduled for November in Scotland. One of the proposals is to start charging lower interest rates for agricultural producers in sectors that generate less carbon emissions. “Low carbon agribusiness will have lower interest rates on loans from agricultural support programs, such as at Banco do Brasil or partner banks. This will start to take effect in 2022,” he said.