January 23, 2020 / 8:31 AM / a month ago

Exclusive: Trafigura to buy Angolan general's stake in Puma Energy - sources

LONDON (Reuters) - Global commodities trader Trafigura is in advanced talks to buy more than 10% of an Angolan general’s stake in its fuel retail arm Puma Energy by the end of the year, sources familiar with the matter said.

FILE PHOTO: Trafigura logo is pictured in the company entrance in Geneva, Switzerland March 11, 2012. REUTERS/Denis Balibouse

Retired general Leopoldino Fragoso do Nascimento, known as General Dino, holds a 15% stake in Puma via his company Cochan Holdings. Trafigura holds 49% and Angola’s state firm Sonangol 28%.

Puma’s shareholding structure was put together under Trafigura’s former CEO and founder Claude Dauphin, who was close to the former ruling Angolan elite.

However, the Swiss firm’s hopes of listing Puma hit compliance hurdles owing to the general’s presence as a significant stakeholder.

Trafigura has wanted to restructure Puma’s ownership for years but the move to buy out Cochan only began in earnest after Emma Fitzgerald took over as Puma’s chief executive in January last year.

Puma and Trafigura declined to comment. Cochan did not respond to a request for comment.

The move comes as Angola itself is reviewing its assets. The government announced a cross-sector privatization drive last year, including its aim to list state oil firm Sonangol by 2022 and divest its stake in Puma.

In a first step, Cochan agreed last year to no longer be represented on Puma’s board.

A source familiar with the matter said this had already allowed Puma to widen its pool of banks.

Fitzgerald took the helm at difficult time for Puma, which has been loss-making since 2018.

After a McKinsey review, the firm has been selling off assets such as its business in Paraguay and more recently Australian assets which had become a drag on its finances.

One source said that Trafigura planned to reduce General Dino’s stake to less than 5% with the aim of attracting more global banks and new equity investment. The deal will not be a pure cash exchange.

Trafigura will likely spend between $357 million and $535 million for the stake.

In its 2019 annual report, Trafigura reduced the value of its stake in Puma by $200 million to $1.75 billion, valuing the company at $3.57 billion.

The trading firm has other business links with Cochan, namely a joint venture called DTS Holdings which is the main holding company of DT Group and which focuses on sub-Saharan and Angolan investments.

Puma, which traces its roots to Argentina, has around 3,000 retail fuel stations in Latin America, Africa and Asia-Pacific.

Rival Vitol Group listed its Africa-focused retail fuel unit Vivo Energy on the London Stock Exchange in 2018 that launched at about 2 billion pounds.

Reporting by Dmitry Zhdannikov and Julia Payne in London; editing by Jason Neely

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