May 17, 2019 / 4:22 PM / a year ago

Petrobras removes three banks from BR Distribuidora privatization -sources

RIO DE JANEIRO/SAO PAULO, May 17 (Reuters) - Brazilian state-run oil firm Petroleo Brasileiro SA has removed three banks from the privatization process of fuel distribution unit Petrobras Distribuidora, four sources with knowledge of the matter told Reuters this week.

BR Distribuidora, as the unit is known, is among the assets that Petrobras intends sell to reduce debt and increase investments in oil exploration and production. Petrobras holds a 71.25% stake in BR Distribuidora and is seeking to privatize the fuel distributor through a share offering in the coming weeks.

Petrobras had originally hired nine banks to coordinate the offering, but recently removed the investment banking units of Banco Bradesco SA, Banco do Brasil SA and HSBC Holdings Plc, the sources said. The number of banks involved in the deal is now six.

Petrobras cut the number of advisers to ensure better coordination among the banks, three sources said, asking for anonymity to disclose private discussions.

Two of the sources said Petrobras Chief Executive Officer Roberto Castello Branco, known for his hands-on management style, personally advocated for the number of banks to be reduced.

Petrobras' divestments are expected to be a major driver of capital markets activity in Brazil this year and many investment banks are eager to get a piece of the action.

JPMorgan Chase & Co and Citigroup Inc, along with Itau Unibanco Holding SA, Bank of America Corp , Credit Suisse Group AG, and Banco Santander Brasil SA remain in the deal, the sources said.

Petrobras did not respond to a request for comment. Bradesco, Banco do Brasil and HSBC declined to comment. (Reporting by Gram Slattery and Carolina Mandl; Additional reporting by Tatiana Bautzer; Editing by Jeffrey Benkoe)

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