August 27, 2019 / 9:52 PM / 24 days ago

CORRECTED-Petroperu aims to sell 10%-15% of shares in private placement next year

(Corrects sixth graph to remove reference to ruling out selling more bonds)

LIMA, Aug 27 (Reuters) - State-owned Peruvian oil company Petroperu wants to sell 10% to 15% of its shares through a private placement offering next year to pay down its debt, the head of the company said on Tuesday.

Carlos Paredes said international banks will submit proposals for advising Petroperu on the transaction on Monday.

“I think it’s indispensable” to incorporate private partners in the company, Paredes told a news conference.

Under a 2013 Peruvian law, Petroperu can privatize up to 49% of its shares. But the company has thus far declined to sell any while a $4.7 billion expansion at its Talara refinery that began in 2014 has faced repeated delays and cost overruns.

“I’m not going to do it with a traditional IPO because the value of Petroperu would be punished because the new refinery isn’t operating,” said Paredes, who was appointed chairman of Petroperu’s board in May.

Paredes reiterated the company was also evaluating selling units at Talara to raise some $800 million to close the remaining financing gap.

Petroperu has already sold $2 billion in dollar-denominated bonds and secured a $1.3 billion loan from Spanish state-backed insurer Cesce to pay for the project.

“Petroperu is overindebted,” Paredes said. “It’s overindebted because it took on too much debt to build the refinery.” (Reporting by Mitra Taj Editing by Tom Brown and Sonya Hepinstall)

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