Corporacion Financiera Colombiana (Corficolombiana) plans to launch Tuesday an offer to buy the 75.03% of shares in gas distribution and pipeline company Promigas it does not own. The financial group is offering up to COP2.49trn ($1.41bn), targeting 99.7m shares at a price of COP25,000 each, in the offer scheduled to close September 12. The offer has been planned since Corficolombiana, along with other investors, closed the acquisition of companies owning 52.13% in Promigas. Fellow Grupo Aval unit Casa de Bolsa is managing the process.
Category: M&A
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Pacific Rubiales Enters Onshore Block
Pacific Rubiales has agreed to acquire 40% of the onshore Portofino exploration block in Colombia from Petromont, and co-operator status with Canacol Energy, for up to $72.2m. In the deal, Rubiales is to pay $23.5m cash to Petromont, and finance certain other obligations related to production facilities and other activities required for the development of the block, for up to $45m. It will also pay $3.7m to Canacol to assume operatorship of the block. The transaction is subject to government and regulatory approvals. The Portofino block, in the Caguan-Putumayo Basin in southern Colombia, contains an estimated 140m-160m barrels in reserves.
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Chevron to Provide Loan for Vene JV
PDVSA and Chevron have agreed to terms for a $2bn financing for their Petroboscan joint venture, PDVSA says. The US oil producer is providing “long-term” loan at a rate of Libor+4.5%. It does not state the exact tenor, but says the last payment is scheduled for 2025. Petroboscan, operated by the two since 2006, plans to use the proceeds for increasing oil production in the Boscan oil field. The parties involved did not respond to request for additional comment.
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Repsol Exits Chilean Gas Distributor
Repsol has sold its subsidiary Repsol Butano Chile, which held a 45% stake in Chilean gas distributor Lipigas, for about $540m, it says. The sale cuts Repsol’s debt by $317m and results in a net capital gain of $170m for the company. For the last few years, Repsol has been selling non-core assets in LatAm to focus on vertically integrated operations and free up cash for exploration and production. Also, the company is working to protect its investment grade status following a downgrade after YPF’s nationalization. A Repsol spokesperson declines to disclose advisors used in the transaction. It is part of a wider EUR4.5bn ($5.49bn) disposal program for 2012-2016, of which it has sold off EUR2bn so far.
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Fibra Uno Adds Portfolio
Mexico’s Fibra Uno, a real estate income trust, has agreed to purchase a package of real estate assets totaling MXP11.6bn ($881m), it says. The deal includes the assumption of MXP8.4bn in debt. The package includes 7 commercial complexes, 5 office buildings, 3 industrial properties and the concession to operate a commercial area within a port complex, located in the states of Quintana Roo, Jalisco, Nuevo Leon, Nayarit and Mexico, and in Mexico City. The transaction is expected to close by year-end. Fibra Uno has raised MXP12.5bn in two visits to the capital markets, becoming the first and so far only real estate trust in Mexico.
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Indians Quit Bolivia
India’s Jindal Steel & Power has terminated its $2.1bn contract with the Bolivian government for the El Mutun iron ore project, it says. The exit is prompted by the Bolivian government’s unwillingness to supply 10m cubic meters per day of gas within 180 days of signing the contract to the company’s facilities, as was originally agreed, the company says. Instead, the government offered 2.5m cubic meters a day from 2014. Jindal adds that the government also didn’t accept its request to scale down the investment, given the shortage of gas. It plans to pursue international arbitration. The contract for mining and steelmaking was originally signed in 2007.
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Millicom Buys in Paraguay (1)
Luxembourg-based telecom Millicom International Cellular has agreed to acquire Cablevision Paraguay for $150m, it says. The buy accelerates growth in Millicom’s fixed broadband services, says a person familiar with the deal, noting that CableVision Paraguay provides television and some fixed cable services to about 470,000 households in the country’s capital. Cablevision, meanwhile, is analyzing investment alternatives for the use of funds. Millicom declined to disclose its advisors. Cablevision worked with Saenz Valiente & Asociados, Errecondo, Salaverri, Dellatorre, Gonzalez y Burgio, as well as with Estudio Caniza in Paraguay. The deal is expected to close this year, subject to approvals.
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Posadas Shifts Focus to Ride Mexican Growth (1)
As part of a continuing strategy to strengthen its balance sheet and refocus on Mexico, Grupo Posadas has sold its South American hotels to France’s Accor for $275m, it says. The deal also reflects a renewed focus on Mexico’s domestic market at a time when economists are forecasting better numbers for growth in the country and in the tourism sector. “We have completed a very satisfactory transaction that will allow us to reduce our debt levels and look forward to further growth and strengthening our leadership position in Mexico,” Ruben Camiro, Posadas’ CFO, tells LatinFinance. Funds from the sale are going to be used to pay down debt and contribute to the company’s domestic growth. Posadas’ growth is likely to be organic, he says, with no plans for acquisitions in Mexico. The deleveraging process has been a long one for Posadas, which was caught on the wrong side of currency swaps during the crisis and has struggled with liquidity since. It raised MXP900m ($71m) through the sale of convertible 9.0% 2014 domestic bonds to existing shareholders in March, bringing leverage to near 6.0x from 6.8x at year-end 2011, according to Fitch, which rates Posadas B minus. Camiro says the company could look at the bond market next year, depending on maturities available and market conditions. The company has $165m-equivalent in local bonds due in April 2013. Monday’s sale proceeds will also go towards that, and the company could use the bond market to improve its maturity profile. In forecasting better GDP growth numbers in the next 5 years for Mexico, economists point to tourism as one of the many sectors that would revive with a continued recovery in the US. In fact, a recovery strong enough to draw visitors outside the US, but not strong enough to send travelers further than next door to Mexico, would suit the industry quite well. “Mexican tourism has been picking up quite interestingly this year,” Camiro says, noting growth in Mexico not seen since the crisis. A bette
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Mexichem Renegotiates Bothersome Wavin Debt
Mexichem has wrapped up negations with creditors of recently acquired Wavin, it says, renegotiating terms on EUR320m ($390m) in debt. Agreeing to pay down some of the Dutch pipe makers debt, the amount has been lowered from EUR440m, according to an official at the Mexican petrochemicals producer, generating annual savings of EUR3.2m. Several restrictive covenants have also been eliminated. The official declines to comment on the interest on the debt package due 2015, noting only that 15bp-20bp have been shaved off as a result of the negotiations. Mexichem in May surpassed 95% ownership of Wavin shares, spending nearly EUR400m, and has delisted them.
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Australians Take Brazilian Mining Stake
Australia Acquisition Corp has agreed to purchase a 9.7% stake in Brazil’s Ferrous Resources from Harbinger Capital Partners, it says. The Australian investment vehicle will swap 9.3m shares, worth about $93m, for the stake, as part of a broader $350m transaction that also involves Australia Acquisition getting Asian gaming assets. The transaction should be completed by august. Ferrous operates 6 iron ore mines in the states of Minas Gerais and Bahia. PrinceRidge advised Australia Acquisition.