Category: Corporate & Sovereign Strategy

San Antonio International, the E&P operator controlled by Brazilian private equity firm GP Investments, has agreed to restructure $626m in debt, including extending maturities, swapping debt for equity and raising new equity. The company will issue $112m in new equity, currently being subscribed by investors in a private offering for existing shareholders and an undisclosed new investor. Proceeds will be used to repay $107m in debt. Separately, certain creditors have agreed to convert $109m in debt into preferred shares, which pay an annual coupon but are not considered debt, according to a GP spokeswoman. The company can repurchase the shares at anytime, she says, and expects to do so following an additional share subscription within 2 years. GP also says creditors have agreed to replace $410m of the company’s debt with $330m in 7-year amortizing debt and $80m in 5-year bullet PIK debt. She declines to give the interest rates on the new and old debt, noting only that the average maturity of San Antonio’s debt is now 4 years, up from 2 years, and that debt from 15 creditors was involved, including bank debt from Citi and Credit Agricole. “GP Investments believes the financial restructuring eliminates the short-term refinancing risks for San Antonio and will allow the company to benefit from the rebound in the natural gas and oil services sector in Latin America,” it says in a statement. The consolidated debt of San Antonio was lowered to $671m from $864m, GP says. GP Investments’ IV and V funds expect a payment of $45.8m and $19.7m from the operations. GP’s indirect participation in the company will be 22.4%, up from 17.2%, which represents a controlling interest, it says. The restructuring establishes San Antonio’s value of $865m. When GP bought San Antonio – the LatAm assets of Pride International – in 2007, the purchase was valued at $1bn. Brazil-based San Antonio operates in Brazil, Argentina, Colombia, Venezuela, Bolivia, Peru Ecuador and Mexico, and says that

Fitch has assigned Banco Interacciones, a mid-size Mexican bank focused on lending to government-related entities and infrastructure projects, a BB issuer default rating and a with a stable outlook. Good financial performance, adequate track record on asset quality, improved risk management practices and a good franchise on public sector lending activities support the rating, the agency says. Factors that negatively impact the rating include a modest diversification of lending, high borrower concentration and funding sources, growing competition and acceptable capitalization. As of Q2 2010 it has a domestic market-share of 2.2% of total loans.

Sanluis Co-Inter, a subsidiary of Mexican auto parts maker Sanluis, has filed for concurso mercantil bankruptcy. It does so “with the aim of an orderly restructuring of its debt, based on the capacity to pay and the current conditions in the automotive industry,” it says. The Co-Inter unit needs to restructure $220m in debt, including $88m in 8% of 2010 bonds defaulted on in June, and the $132m in 7% of 2011 bonds which were accelerated by holders shortly after the 2010 default. Problems with the auto industry during the credit crisis have meant dangerously low cashflow levels, says the issuer. The company’s other units, including Sanluis Rassini, will not be affected by the bankruptcy, Sanluis says. Santamarina y Steta and Javier Perez Rocha are advising Sanluis, according to a source at the debtor.