Alfa Assumes $1 Bln Loss in Pacific E&P

Instant Max AI

(Energy Analytics Institute, Jared Yamin, 21.May.2016) – Mexican conglomerate Alfa considers its entire $1 billion in investment in Pacific Exploration & Production — the Canadian oil company with operations in Colombia — as a total loss after the oil company announced plans to restructure its debt with a private fund, reported Reuters, citing an unnamed company executive.

In April of 2016, Pacific reached an agreement with its creditors and Catalyst Capital Group investment fund related to its financial restructuring. The deal, expected to conclude during the third quarter of 2016, left Alfa out of the process.

The agreement with creditors practically made them owners of Pacific by diluting the stockholder’s participation down to zero, said Alfa General Director Álvaro Fernández.

Alfa’s investment in Pacific fell to $38 million in the first quarter of 2016 due to the fall in oil prices. Alfa invested $1 billion in the Pacific in 2014 to acquire a 19 percent interest in the company.

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