Cardoso Denies Banks, Petrobras Sale Rumors

Brazil's president Fernando Henrique Cardoso yesterday denied rumors that his government was considering privatizing the country's largest state bank, Banco do Brasil (BB), and the savings and loans institution Caixa Economico Federal (CEF). Cardoso's statements echoed those made by Banco do Brasil director Fernando Amaral last week that a BB privatization would not be considered for at least two years. The BB sale rumor was fueled by market speculation that the Brazilian government would at least partially sell off these institutions, with assets totaling around US$5bn, as a way of raising capital. Neither was Brazil's government planning to privatize state oil company Petrobras (OTC: PEBRY) now or in the future, President Fernando Henrique Cardoso said yesterday in response to speculation that officials were discussing the sale with IMF representatives. However, Petrobras' new management would have to make important decisions regarding future strategies, which could include privatization of some of the company's subsidiaries, Cardoso said. Petrobras' new president will be appointed after the company's new Administrative Council is unveiled on March 16, Cardoso said. Joel Renno, who ran the company for more than six years, stepped down as president on Friday. Renno's successor could be Antonio Maciel, president of Brazil's Itamarati Group, confidential sources said.