Harvest Enters Share Purchase Agreement to Sell Interests in Venezuela

Source: www.gulfoilandgas.com 12/16/2013, Location: South America

Harvest Natural Resources, Inc and its wholly-owned subsidiary, HNR Energia B.V, have entered into a Share Purchase Agreement with Petroandina Resources Corporation N.V. (Buyer) and Pluspetrol Resources Corporation B.V. (Pluspetrol) to sell, in two separate transactions, all of the Company's interests in Venezuela, for an aggregate of $400.0 million in cash. The Buyer will purchase Harvest's 32% interest in Petrodelta, S.A. by purchasing HNR Energia's 80% interest in Harvest-Vinccler Dutch Holding B.V. (Harvest Vinccler) in two transactions of 29% and 51%, respectively. Harvest Vinccler owns, indirectly through wholly-owned subsidiaries, a 40% interest in Petrodelta, S.A.

HNR Energia and Buyer closed the first transaction today for a cash purchase price of $125 million. The closing of the second transaction for a cash purchase price of $275 million is subject to, among other things, approval by the holders of a majority of the Company's common stock and the Government of the Bolivarian Republic of Venezuela.

Net proceeds after taxes and transaction-related costs from the two transactions are estimated to be approximately $122 million and $208 million, respectively. Proceeds from the first transaction will be used to pay Harvest's long-term debt with the remaining proceeds used for working capital.

James A. Edmiston, President and CEO of Harvest, said, "Closing of the first transaction is a major step forward for the Company as it sets a clear path for our amicable exit from our Venezuelan business while at the same time allowing us to redeem our outstanding debt and providing the required liquidity for us to continue our efforts to unlock the value of the assets of Harvest for the benefit of our shareholders."

Edmiston continued, "With respect to timing, we expect to file our proxy statement for the second transaction before the end of January and obtain shareholder approval in the first quarter of 2014. Subject to Venezuelan government approval, we envision the closing of the second transaction around mid-year. In the interim, we welcome Pluspetrol as a new shareholder in Harvest-Vinccler and look forward to working with them to both grow Petrodelta and close the second transaction."

In connection with the transactions with Pluspetrol, the board of directors of Harvest received a fairness opinion from BofA Merrill Lynch. In addition, the Company was advised by law firms Norton Rose Fulbright, Baker Botts L.L.P., and Baker McKenzie LLP.


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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