The new board of Petróleos del Perú – Petroperú SA has proposed the privatization of the state oil company before its General Meeting of Shareholders (AGM), made up of the ministries of Economy and Finance and of Energy and Mines.
The decision is made in view of the “financial conditions of the company”, which requires “broad financial backing from its shareholder”, in this case, the Peruvian State. The latest calculations, the statement notes, indicate that around an additional US$2.2 billion is needed.
“In the current circumstances of a Petroperú with governance and business management exposed to the usual political appetites, it would be irresponsible and an act of immorality to request greater financing from the State,” he continues.
In this sense, the board of directors of the oil company, which has a majority of the MEF, points out that “nothing ensures that the company will not return in the near future to request more state support, to the detriment of the fiscal coffers and the pockets of Peruvian taxpayers.” .
“That said, this board considers that private management in the management of the company is the best option to achieve a return to financial self-sustainability,” he says.
The board of directors has raised the request for privatization before the AGM last Tuesday, May 7, and before President Boluarte, on the 8th. They are waiting for a definition that, if affirmative, “will allow them to continue with a management that “We believe it can and should be fulfilled for the benefit of Peru.”
Petroperú’s diagnosis
The board made up of David Tuesta, Germán Boza, Carlos Villalobos, Antonio Manosalva and Oliver Stark – chaired by the latter since the departure of Carlos Linares on April 26 – demolishes the results of the Arthur D. Little/Columbus report ( ADL/C), which cost the company about S/10 million at the request of the Executive himself.
According to the board, the ADL/C report, on which the company’s restructuring has been based, “takes as a fundamental assumption that the Peruvian State was going to continue providing unlimited financial support to Petroperú.”
“In fact, the last funding awarded earlier this year was awarded under the recommendations of the ADL/C report,” he notes.
In this regard, it was known that Petroperú operates with limited income growth and low profitability as demonstrated by the sales figures and losses projected to 2024, respectively US$3,977 million (30% less than 2022) and -US$716 million (164% greater than 2022).
“The projected EBITDA for 2024 is US$135 million, insufficient to cover any debt payment. It has [Petroperú] a loss of its competitive position having given up market share from 51% to 25%,” the document states.
The analysis accuses a “serious deterioration” of the liquidity position, working capital, solvency (liabilities/equity) and profitability indicators (ROA/ROE) of 0.4, -US$3,367, 6.26 and -0.7 %/-11.1% respectively, which is why it “suffers from a high degree of instability in management and governance.”
Source: Larepublica
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