By Rogerio Jelmayer

SÃO PAULO -- Brazilian state-run oil company Petróleo Brasileiro SA on Wednesday, said it agreed to sell certain noncore business assets for $587 million, amid its efforts to raise cash and reduce debts.

Petrobras, as the company is also known, will sell its 45.97% stake in sugar and ethanol producer Guarani SA to France's Tereos Internacional, for $202 million.

In a separate statement, Petrobras said it agreed to sell certain petrochemical assets to Mexican petrochemical company Alpek S.A.B. de C.V. for $385 million.

The Brazilian company will sell its petrochemical units Petroquimica Suape and Citepe to Alpek. The subsidiaries operate a plastics plant in the country's northeast Pernambuco state, with capacity of 700,000 tons a year of purified terephthalic acid, or PTA, and 450,000 tons of polyethylene terephthalate, or PET. Citepe also operates a plant on the site which produces 90,000 metric tons a year of texturized polyester filament.

Alpek, a unit of industrial conglomerate Alfa SAB, said the deal requires some corporate and government approvals.

Monterrey, Mexico-based Alpek has annual output capacity of 5.6 million metric tons and had revenues of $5.3 billion in 2015. The acquisition will expand its presence in Brazil, where it operates an expandable polystyrene plant.

Wednesday's announcements were part of Petrobras' plan to sell certain assets to reduce its debt. With those sales, Petrobras said it sold $13.6 billion in assets in the 2015-2016 period.

For the 2017 and 2018 period, Petrobras said it is planning to sell $21 billion in assets.

With the ambitious asset-sale plans, Petrobras said it seeks to reduce its net debt-to-earnings before interest, taxes, depreciation and amortization ratio to 2.5 times in 2018; it was 5.3 times at the end of 2015. Petrobras is the most highly leveraged oil major in the world with $123 billion in gross debt.

Anthony Harrup in Mexico City contributed to this article.

Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com

(END) Dow Jones Newswires

December 28, 2016 17:54 ET (22:54 GMT)

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