Mexico’s nationwide oil firm Pemex will provide to pay again about $2bn it owes to big-ticket suppliers with new debt, probably easing situations for a few of its largest contractors.
In current years Pemex has been racking up money owed to its suppliers, which stood at $13.5bn on the finish of the primary quarter, based on its monetary filings.
The firm didn’t title which suppliers would profit from the provide, however mentioned it might alternate invoices for notes with a coupon of 8.75 per cent due in 2029 to suppliers with greater than $5mn excellent.
In January, oil companies group Schlumberger mentioned it was experiencing fee delays from its major buyer in Mexico and that it was owed about $500mn. Rival Halliburton additionally mentioned about 10 per cent of its receivables had been from Mexico, the place it had additionally had fee delays.
Schlumberger and Halliburton didn’t instantly reply to requests for remark.
Pemex has excellent debt of greater than $100bn, making it one of many world’s most indebted oil firms. Despite recording giant quarterly losses, many rising market funds maintain its bonds due to sturdy authorities backing and the corporate’s larger yield in contrast with Mexico’s sovereign bonds.
The authorities of Andrés Manuel López Obrador, Mexico’s nationalist president, has vowed to “rescue” Pemex after years of privatisation, which he has mentioned was aimed toward destroying it.
The deal introduced on Tuesday covers a complete of $2bn in liabilities, making it impartial to Pemex’s credit score profile, mentioned Nymia Almeida, an analyst at scores company Moody’s.
She added that the transfer was a superb step for the corporate to assist shield its provider base.
“Everybody uses suppliers as a source of financing . . . but this amount has increased in the last few years, it’s actually becoming difficult for suppliers themselves to survive,” Almeida mentioned. “I think from that perspective it’s positive that the company is doing something about it.”
López Obrador has made it a precedence to assist Pemex financially, chopping an necessary tax fee on its earnings to 40 per cent in 2022 from greater than 65 per cent in 2019. The firm additionally not too long ago agreed to purchase again some bonds and swap others to the quantity of greater than $3bn.
At the identical time, the federal government has pursued a technique of being vitality “self-sufficient” that features spending billions for Pemex to construct a brand new oil refinery within the president’s residence state. The plan is unlikely to maximise earnings for the state-owned firm, analysts say, and crude oil manufacturing has continued to say no.