Trafigura's Puma Energy hires BAML for asset sale - sources
INTERNATIONAL - Puma Energy, the retail and storage arm of commodities trader Trafigura, has hired Bank of America Merrill Lynch (BAML) to run the sale of some of its assets, sources familiar with the matter said, in an effort to trim debt.
Assets in the Democratic Republic of Congo, South Africa, Senegal and Australia were among those slated to be sold, one source said.
A Puma spokeswoman declined to comment on the specific assets for sale. BAML and Trafigura also declined to comment.
In its first-quarter results unveiled in May, Puma announced two non-core asset sales but gave no details.
Puma has suffered net losses due largely to a currency devaluation in Angola and increased competition in Australia that affected the profitability of its fuel stations.
The company posted a net loss of $30 million for 2018 and a net loss of $15 million in the first quarter this year.
Puma also faces pressure from ratings agencies. In September and October last year, Fitch and Moody’s changed their outlooks on Puma to negative, meaning downgrades could loom this year if insufficient action is taken to reduce debt.
Between 2017 and 2018, Puma raised $1.35 billion in bonds due in 2024 and 2026.
Puma’s chief executive Emma Fitzgerald took over in January from Pierre Eladari, who oversaw a period of expansion. Fitzgerald has hired new senior management including a chief financial officer, a head for Africa and a chief transformation officer.
A review of the business by consulting firm McKinsey was completed in March, Puma said.
Recent measures taken by the company included a renegotiation of two debt covenants and a board change. Cochan Holdings, which is run by a former Angolan general and owns 15% of Puma, is no longer represented on the board, Puma said.
Puma’s spokeswoman said the firm was complying with its covenants.
“We have a stated commitment to deleveraging the balance sheet via portfolio refocus ... Assuming a successful portfolio review and subsequent asset divestments without major disruption, our target net debt over EBITDA ratio for the end of 2020 is <2.5x,” she added.
Puma, which traces its roots to Argentina, has more than 3,100 fuel retail stations in Latin America, Africa and Asia-Pacific. Trafigura owns 49% of Puma, Angola’s state firm Sonangol holds 28% and 7% is held by other investors.