IPPToday #87: IFC sells Pacific Midstream stakes back to Frontera
Related M&A Transactions
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Frontera Energy Corporation has signed an agreement to acquire the outstanding 36.36% ownership of Pacific Midstream Limited (PML) from the International Finance Corporation (IFC) and from funds related to the IFC.
Following the acquisition, Frontera will own 100% of PML which will enable the company to pursue initiatives related to the reduction of, and unwinding of, various transportation commitments, including fixed rate take-or-pay arrangements.
Consideration for the acquisition will be $225 million in cash, paid in installments over a 36-month period, plus accrued interest over unpaid amounts.
The completion of the transaction is subject to obtaining modifications to Frontera's take-or-pay contracts, which are expected to reduce tariffs, and other customary conditions of closing. In addition, the consent of the company's noteholders and secured lenders is required to complete the transaction.
The ownership percentages comprised in the transaction as follows: Petroelectrica de los Llanos (100% ownership), Oleoducto Bicentenario de Colombia S.A.S (43% ownership), and Oleoducto de los Llanos Orientales S.A (35% ownership).
Gabriel de Alba, Chairman of Frontera, commented,:
"This is a very strategic acquisition for Frontera as we pursue a series of initiatives intended to reduce our corporate transportation costs, provide long term transportation flexibility, and reduce fixed cost transportation obligations."
Pacific Midstream Ltd., is a subsidiary of Canadian energy firm Pacific Exploration and Production, which holds certain of its parent company's pipeline and power transmission assets involving petroleum exploration and production of heavy crude oil and natural gas. Its focus is on Colombia and Peru where it holds numerous properties.
During the last month we have reported about several M&A transactions in North America:
- Canadian Solar sells three solar farms to Shenzhen Energy
- Brookfield buys a stake in a renewable power portfolio from TerraForm Power
- New Energy Solar acquires 130 MW DC in solar facilities from Cypress Creek Renewables
- Brookfield Asset Management acquires Abengoa SA's stake in Atlantica Yield
- John Laing Group buys a majority stake in a wind asset from GE and Akuo
- ArcLight sells Hamakua Energy Plant to Pacific Current
- ArcLight Capital Partners acquires a stake in Olympic Pipeline from ARCO Midcon
- Alliant acquires Upland Prairie wind farm from Apex