Category: Peru

Hong Kong-based China Fishery Group is buying Dorbes Holding, the parent company of Peru-based fishery Pesquera Alejandria, for $95m in cash. The sellers are Silkfield International, Orbel Business and Harleston Technologies. With the acquisition, China Fishery claims it will become Peru’s sixth largest fishmeal company, increasing its fishing quota allocation in northern Peru to 6.05% from 5.08%, and in the south to 10.91% from 7.87%. Citi advised Alejandria, according to a Peru-based corporate lawyer familiar with the deal. He adds that it is likely the Chinese buyer did not use an advisor. The buyer says it hired Peruvian surveyor JRZ Ajustadores y Peritos de Seguros to conduct a valuation of the target. The deal is expected to be completed May 24. China Fishery trades in Singapore, while the sellers are incorporated in Panama.

Peru’s finance ministry plans to auction up to 150 million soles ($53m) in 2 series of reopened sovereign bonds on the local market today. The bonds will be auctioned on Tuesday, according to the state news agency. A PES100m 2042 tranche pays 6.85%, while PES50m in 2046 pay 3.83% plus the Valor Adquisitivo Constante rate.

Barclays Natural Resource Investments (BNRI), a unit of Barclays Capital, is giving a line of equity to the management team of Southern Peaks Mining, a Peru-focused mining start up. The deal is BNRI’s first with a LatAm-focused mining management team. A Barclays spokesman declines to state how much BNRI is lending, though he adds that the unit typically commits between $50m-$100m per transaction. Deals are generally structured as lines of equity, whereby management teams identify potential asset and transaction opportunities and take them to the board for discussion and approval. The equity is then drawn down as required, subject to a total commitment cap agreed upfront. Southern Peaks Mining was established to acquire operating or close-to-operating, small-to medium-sized base and precious metals assets initially in Peru, and later potentially elsewhere in LatAm. The team is lead by Adolfo Vera, who has served as CFO at Peru-based Volcan Cia. Minera and Canada-based Silver Eagle Mines.

After catching the market by surprise last week with a 25bp rate hike to 1.50%, Peru’s central bank says more tightening is not imminent. “The increase in the rate is preemptive in nature as clear indications of increasing activity, against a backdrop without inflationary pressures, allows for a reduction of monetary stimulus,” the bank says. It adds that future hikes will depend on inflation. Annual inflation stands at 1.85%, within the target range of 1.00%-3.00%. Goldman Sachs believes the decision is acceptable or understandable given its preemptive nature. It expects to see the policy rate at around 3.00%-3.25% by end 2010 and 5.00% by July 2011.

Peru’s central bank is expected to keep rates at 1.25% today, according to market consensus. Morgan Stanley’s and Roubini Global Economics’ forecasts are in line with consensus, as inflation remains low. Bank of America Merrill Lynch also agrees, saying that it expects Peru to begin a tightening cycle in July, although it may tighten reserve requirements before that to limit currency appreciation.

Peruvian gas distributor Calidda is getting a $50m loan from the IFC to help provide gas connections to more that 45,000 households. The financing is part of a $135m package which also involves CAF. The funding will help Calidda expand capacity of its distribution network from 255m cubic feet to 420m cubic feet a day. This funding will support implementation of Calidda’s $200m investment plan for the next 4 years. The IFC is not disclosing terms of the loan, saying only that it is a long-term.

Peru plans to use $66m from its cash stockpile to fund last week’s bond buyback, the finance ministry says. It will refund this amount by selling domestic or external bonds at a later date when market conditions are acceptable. The sovereign agreed to exchange $1.80bn in 4 series outstanding global 2012-2016 bonds for $1.26bn in reopened 8.75% of 2033 notes and $500m cash, following the conclusion of an exchange offer. Proceeds from previous domestic bond sales are being used to meet the bulk of the $500m cash component, the ministry says.

Transportadora de Gas del Peru sold up to $150m in 15-year bonds on the local market. TGP sold $100m of bonds priced at 100.0 with floating rate of 3.375% over 3-month Libor. Total demand for this tranche was $235m. It also sold another tranche of $50m priced at 100.0 with a fixed rate of 7.25%. Total demand was $50.9m. Proceeds from the sale, rated AAA on a national scale, will help fund expansion and upgrade to TGP’s natural gas and liquid natural gas network. BCP is managing the sale, the first from a $400m shelf.

Peru has agreed to exchange $1.80bn in outstanding global bonds for $1.26bn in reopened 8.75% of 2033 notes and $500m cash, it says, following the conclusion of an exchange offer launched last week. The sovereign had offered to swap $3.36bn in outstanding 2012, 2014, 2015 and 2016 bonds, for the 2033s or cash capped at $500m. Following the offer, there are $312.2m outstanding in the 9.125% of 2012 dollar notes, EUR290.7m in 7.500% of 2014 euro notes, 278.5m in 9.875% of 2015 dollar notes and $581.1m in 8.375% of 2016 in dollars. Barclays and HSBC managed the transaction.