CAMPOS DO JORDÃO, Brazil: Petróleo Brasileiro SA will aim to launch the initial public offering of fuel distribution unit BR Distribuidora SA by early December after having fixed a hefty debt issue that afflicted the subsidiary for years, Chairman Nelson Carvalho said on Friday.

Earlier in the day, the Brazilian oil producer known as Petrobras agreed to inject 6.3 billion reais ($2 billion) into BR Distribuidora. This will in turn transfer part of 10.4 billion reais worth of invoice receipts that a state power utility owes to Petrobras subsidiaries for fuel sales.

He said the capital injection solves the main hurdle to the BR Distribuidora IPO, because the hefty burden of invoice receipts were depressing potential valuations. The board of Petrobras has already selected a roster of banks to meet the IPO deadline, Carvalho said.

The IPO of BR Distribuidora, which controls Brazil's largest network of gas stations, has been stymied time and again since the government first proposed it in 2015. Petrobras revived the plan in June to cut debt and capital spending in low-return activities.

Reuters reported earlier this month that Citigroup Inc and seven other banks would underwrite the IPO.

"Works for the IPO are at full steam," Carvalho said on the sidelines of a seminar hosted by B3 Bolsa Balcão Brasil SA.

Regarding the debt that state-controlled power holding company Centrais Elétricas Brasileiras SA now has with Petrobras, Carvalho said the oil producer is considering bundling the debt's receivables into securities that could be sold to investors. He did not elaborate.

Brazilian companies often repackage such type of assets, from property to contract receivables, into notes that are similar to asset-backed securities and are known locally as FIDCs.

Petrobras said that the capital injection remains subject to approval by shareholders and other stakeholders.

Preferred shares of Petrobras rose 0.4 percent to 13.86 reais, paring back their year-to-date decline to 6.8 percent.