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Petroleo Brasileiro SA (Petrobras) has confirmed that its executive board has given the go-ahead for an initial public offer (IPO) of shares in fully owned subsidiary Petrobras Distribuidora S.A. - or BR Distribuidora (BR)

The energy firm said the offering would be exclusively secondary, in which existing shareholders sell part of their stakes.

The move is aimed at listing BR on the Novo Mercado special listing segment of the B3 (formerly BM&FBOVESPA) stock exchange.

BR operates more than 7,000 service stations in Brazil and is the largest distributor and marketer of petroleum derivatives and biofuels in Latin America. The business is also responsible for the sale of marine lubricants as well as local maritime diesel fuel that is compliant with Brazil's National Petroleum Agency (NPA) specifications.

The decision to press ahead with the secondary offering follows an announcement on June 22, in which the company confirmed that its executive board had given the go-ahead to examine a possible IPO for BR.

"We have already seen a considerable number of IPOs this year, and we think that market conditions are extremely favourable for considering this step," president Pedro Parente said last month.

Back in March, Petrobras's executive board said in a securities filing that it was looking at divesting five key assets, including BR Distribuidora.

The energy giant has gone back and forth on the sale of its fuel distribution unit over the past two years. It is aiming to reduce debt of around $100 billion by focusing on asset sales, slashing capital spending and cost reductions, and to move forward following its well-publicized corruption scandal.

Currently, the Brazilian government directly owns 54 percent of Petrobras' common shares with voting rights, while the Brazilian Development Bank (BNDES) and The Sovereign Fund of Brazil (Fundo Soberano do Brasil) each control 5 percent, bringing the state's direct and indirect ownership to 64 percent.