Petrofac Limited has introduced that it has signed an settlement to promote 49% of the Company’s operations in Mexico, together with Santuario, Magallanes and Arenque, to Perenco (Oil & Gas) International Limited (Perenco). The transaction is topic to approval by the Federal Competition Commission of Mexico (COFECE), which is predicted in fourth-quarter 2018.


Under the phrases of the settlement, Perenco can pay an preliminary money consideration of $200 million, with $30 million payable upon signing and $170 million payable upon completion. The whole consideration contains a hard and fast quantity and contingent consideration relying upon a variety of future milestones, together with future area improvement and migration phrases of Petrofac’s Magallanes and Arenque Production Enhancement Contracts. This closing quantity is topic to adjustment based mostly on achievement of the milestones above and shall be capped at $274 million. Petrofac presently estimates that an impairment cost of roughly $100 million shall be acknowledged on completion towards its 100% fairness curiosity in its Mexican subsidiaries. Proceeds from the sale shall be used to cut back gross debt.


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