Brazil’s state-controlled oil company Petróleo Brasileiro SA is considering selling control of fuel distribution unit BR Distribuidora SA after bidders failed to emerge for a minority stake, two sources with direct knowledge of the plans said on Friday.

The oil company is mulling a change in strategy for the unit sale after three of the four bidders that delivered preliminary proposals wanted management rights or a bigger slice of voting stock, said one source, who requested anonymity because details of the plan are private. About 30 companies had initially shown interest in the stake, both sources said.

None of the proposals for BR Distribuidora specified a price for the unit, the sources added. The company, which controls Brazil’s largest gasoline, ethanol and diesel-station network, was valued last year at around $10 billion by UBS Securities analysts.

Petrobras’ struggles to sell the minority stake underscored the hurdles it faced as slumping oil prices and fallout from a massive corruption probe known as “Operation Car Wash” have forced the company to sell assets and cut spending.

Concerns over corporate governance standards at Petrobras, highlighted by the probe, have left bidders wary of buying minority stakes in units put up for sale, bankers said.

Last November, Petrobras called off an initial public offering of BR Distribuidora, citing challenging market conditions.

The four bidders included Canada’s Brookfield Asset Management Inc and private-equity firms GP Investments Ltd and Advent International, one source said. A single bidder expressed interest in the minority stake, the same source added, without naming the investor.

Selling a majority stake would help Petrobras lure more bidders, prop up the value of the unit during a more competitive process and avert another failed auction, the sources said.

Petrobras’ board and its lawyers are analyzing whether congressional approval would be needed since surrendering control could be seen as a privatization, they noted.

Petrobras, GP Investments, Brookfield and Advent all declined to comment.

NEED FOR CASH

Petrobras expects to sell $15 billion in assets, including BR Distribuidora, units outside Brazil and even oil fields this year. However, one source said a Chinese loan of up to $10 billion announced in late February helped ease Petrobras’ cash needs.

About $5 billion worth of asset sales by the end of next year should be enough to allow the company to handle investment needs and coming debt expirations, according to one source.

Prosecutors have found evidence that Petrobras and other state companies awarded overpriced contracts to large engineering companies, which would then funnel the excess proceeds into bribes for ruling coalition members.

Many of the executives running Petrobras units were political appointees who facilitated the scheme, the probe found.

Some of the 30 firms that initially showed interest in BR Distribuidora included GPA SA, Brazil’s largest diversified retailer, and Ultrapar Participações SA, one of the nation’s biggest diversified industrial groups, according to the sources.

Bankers at Citigroup Inc, Petrobras’ adviser on the deal, told interested parties that the minority stake would be between 25 percent and 40 percent, the sources said.

Citigroup, GPA and Ultrapar declined to comment.

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