Repsol of Spain identified in its 2012-2016 Strategic Plan different options to reinforce its financial structure and liquidity position. Some of these alternatives have already been materialized, such as the start of the Flexible Dividend program and the sale of 100% of Repsol Butano Chile for approximately $540 million.
As part of the asset divestment program, Repsol is analyzing alternatives as part of a dynamic management of its business portfolio amongst which are included the Liquefied Natural Gas business. This analysis is in a preliminary phase, with no decision having been taken at this time.
At the same time, and to improve the company’s liquidity and reinforce its cash position from potentially adverse market conditions, the company has closed three separate financial transactions for a total amount of 1 billion euros and 12 months term, by entering into three financial derivatives (share forward transaction) with 104,762,387 shares of Gas Natural SDG, S.A., representing 10.47% of its share capital, as underlying assets.
At maturity, the financial derivatives will be cash settled and Repsol will be obliged to reimburse to each financial entity the market value of the underlying shares on the settlement date. Simultaneously to the closing of the derivatives and hedging any variation of the price of the underlying shares, Repsol entered into other derivative with each final entity (share swap transaction) for the same notional amount and also with cash settlement at maturity.
Repsol has pledged the underlying shares of each transaction to guarantee its payment obligations. This agreement does not imply the transmission of the shares of Gas Natural SDG SA, over which Repsol maintains the voting and financial rights.
Repsol has total liquidity of 7.8 billion euros, with 3.1 billion euros available in cash and 4.7 billion euros in undrawn credit lines, guaranteeing its investment capacity without having to resort to the markets.
LNG World News Staff, July 20, 2012