GSP Will Not Meet the Deadline for the Financial Closing
21 Januar 2017 - 1:34AM
Business Wire
As it is known, the concessionaire in charge of the Peruvian
Southern Gas Pipeline project has been working for months to make
the financial closing feasible and allow the project to continue
its course. The deadline to reach this is January 23rd. However, as
a matter of public knowledge, one requirement to achieve the
financial closing was that Odebrecht had to sell its shares in the
project, which has not yet occurred.
Today we can confirm that the financial closing will not occur
before January 23rd, which is the deadline that had been stipulated
in the contract, therefore the Peruvian Government is entitled to
terminate the concession contract, whose shareholders are Odebrecht
(55%), Enagás (25%) and Graña y Montero (20%).
The next step will be to carry out a bidding process for the
concession, with GSP having the right to receive the amount
obtained from the auction, being 72.25% of the Net Book Value
(total amount invested in the project) the minimum to receive.
Likewise, the concession contract states that the termination of
the contract entails the execution of a Performance Guarantee,
which amounts to US$ 262,500,000, of which our subsidiary Negocios
de Gas S.A. is responsible for 20%. This amount is equivalent to
US$ 52,500,000.
Graña y Montero (NYSE: GRAM) (BVL: GRAMONC1) estimates that it
could recover a significant percentage of the investment made in
the Southern Gas Pipeline project, in an estimated maximum term of
3 years.
As it is known, Graña y Montero entered the project 15 months
after the awarding took place. This was achieved through an
increase in capital which allowed it to acquire a 20% stake in the
project, with the objective of reducing Odebrecht's participation
due to the problems it faced in Brazil.
"Our interest when joining the Southern Gas Pipeline project was
for the project to materialize, since it is very important for the
development of the country's energy system and it is a strategic
business commitment for the Group," said Mario Alvarado
Pflucker.
He also added that Graña y Montero will continue betting on
energy projects in Peru and the region, as it is one of the
resources that are most needed to boost development.
Facts about Graña y Montero’s participation in GSP
- In September 2015, Graña y Montero
agreed to enter GSP with a 20% stake, making a capital increase.
This was requested by Enagás and the banks that would finance the
project, with the objective to reduce Odebrecht’s participation due
to the problems that it faced in Brazil.
- After the allegations in Brazil since
March 2016, both Enagás and Graña y Montero took on a more active
role in seeking alternatives to carry out the project without
Odebrecht (while they were selling their shares).
- Graña y Montero has been interested in
GSP since the beginning of the project as it considers it vital for
the development of the country. In addition, it was the most
important project to be developed in the Oil & Gas sector where
the Group has a strategic commitment for which it has been
preparing for a long time, with the acquisition of COGA in 2014,
which is a component of it.
About Graña y Montero S.A.A.
Founded in 1933, Graña y Montero is the only Peruvian
engineering and construction company listed on the Lima Stock
Exchange since 1997 and in the NYSE since 2013. The Company has
participated in the development of major engineering and
construction projects in Peru, including large-scale, complex
projects in the energy, mining, construction and real estate
sectors.
It currently has subsidiaries in Chile and Colombia, and has
been executing major projects in Panama, Bolivia, Jamaica and
Ecuador. By the end of 2015, the Group’s international revenues
amounted to approximately US$ 600 million.
With 83 years of operations, the Company has leveraged its
engineering and construction expertise into complementary lines of
business, such as the development, ownership, operation and
maintenance of infrastructure assets, real estate developments, and
the provision of technical services. The Company has significant
investments in infrastructure concessions, such as three toll roads
and Line 1 of the Lima Metro.
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version on businesswire.com: http://www.businesswire.com/news/home/20170120005681/en/
Graña y MonteroSamantha Ratcliffe, 511-213-6573Investor
Relationssamantha.ratcliffe@gym.com.perelacion.inversionistas@gym.com.pehttp://investorrelations.granaymontero.com.pe/orBelén
Masson, 511-213-6565 Ext. 6453Investor
Relationsbelen.masson@gym.com.perelacion.inversionistas@gym.com.pehttp://investorrelations.granaymontero.com.pe/
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