Mexico City – The head of Mexican state-owned Petroleos Mexicanos said here Thursday that the company now has the necessary funds to acquire an additional 5 percent stake in Spanish oil major Repsol-YPF.
Juan Jose Suarez Coppel said at a press conference that Pemex will rely on bond sales for 70 percent of the $1.7 billion it anticipates needing to increase its stake in Repsol to 9.81 percent.
The proposed operation is part of a pact between Pemex and Spanish construction company Sacyr Vallehermoso to form a voting alliance on Repsol's board of directors. According to Suarez Coppel, that partnership "is in Repsol's best interest and our (best interest) as shareholders."
Suarez Coppel said Pemex and Sacyr, which will hold a combined 29.8 percent of Repsol - near the 30 percent ceiling that would force them to launch a bid for all the remaining shares - want the Spanish company to have separate positions for chairman of the board and CEO. Currently, Antonio Brufau holds both posts.
He also said Pemex has "no interest" in increasing its stake in the Spanish oil company to more than 9.81 percent.
The current 4.81 percent stake in Repsol did not give Pemex "much influence or visibility in the decision-making," while the pact with Sacyr gives the company "much more opportunity to participate in strategic decisions and corporate governance," Suarez Coppel said.
In that regard, he said Pemex could name a second member to Repsol's board.
"This operation is respectful of all applicable laws and regulations" and both Pemex and Sacyr are looking to "be in line with all the shareholders" so this is not a conflict pitting "one group against the others," he said.
"We've been very careful with the legal aspects" of the operation, Suarez Coppel said.
But Brufau, speaking on behalf of Repsol's board, described the operation as an "assault" on the oil company by the two partners; some groups of minority shareholders also have expressed their opposition to the Sacyr-Pemex alliance.
Suarez Coppel said the idea is to "keep Repsol Spanish, improve its management, corporate governance and its relations with its subsidiaries."
It is important to ensure that Repsol follows a course focused on maximizing value creation, which in Pemex's judgment, means increasing exploration activity, he said.
Pemex will acquire the additional stake through its Dutch-based subsidiary PMI Holdings, although the cost of the purchase could vary because Repsol's share price has risen almost 9 percent since the alliance and the plans for Pemex's stake increase were announced.
The deal is aimed at increasing Pemex's value and that of all its assets, as well as "boosting its executional ability, technology and knowledge" to better develop its resources, Suarez Coppel said.