After all the excesses of two bubble eras, it is hard to believe that the record for the world’s largest-ever share offering, that of Japan’s NTT, has stood for 23 years.
It is even harder to believe that, rather than some plodding giant from a developed country, the record is being broken by a rights issue from a state-controlled, developing world commodity producer. But shareholders ploughing some $70bn into Petrobras are attracted to the issue because of, not in spite of, its size.
To be fair, some $43bn of that is the value given to a payment-in-kind from the Brazilian government – an estimated 5bn barrels of oil reserves. Even if it buys no more shares, the state will increase its economic stake in the company, a sort of partial de-privatisation.