Trafigura Buys into Argentina-Focused Producer

Global commodities trader Trafigura has snapped up a minority stake in Argentina-focused oil and gas producer President Energy, the latter said in a London stock filing on January 20.

Trafigura has subscribed for 76mn new shares in President at £0.0404/share, for a total of $4mn. This gives it just under a 6.1% stake in the company, which has assets in Argentina’s Noroeste and Neuquen basins, as well as interests in Paraguay and the US. Trafigura has also taken an option for a further $6mn of shares at a price of £0.0465/share.

President added that a company controlled by its CEO Peter Levine, IYA Global, had agreed to convert a $4.8mn loan into new shares. Initially, $2mn of the loan will be converted at £0.0404/share, raising Levine’s stake in the firm to just under 30%. The executive has an option to convert the rest of the loan at £0.0465/share.

As a result of these deals, President will cut its net debt by $6mn, initially, and possibly by up to $14.8mn.

“We welcome Trafigura as a significant stakeholder in President. Trafigura, already an important off-taker of the group, is an international trading and logistics company with extensive interests in the energy sector,” Levine said in a statement. “With reduced debt and concomitant lower servicing requirements combined with a substantial and supportive international industry partner as a significant shareholder alongside myself and other shareholders, we are well placed to deliver on our strategy to generate growth not only organically but also through being able to take advantage of appropriate opportunities in various jurisdictions as they arise in the future.”