MONTERREY, Mexico, May 19 (Reuters) - Mexican conglomerate
Alfa now considers its investment in Pacific Exploration &
Production a total loss after the Canadian hydrocarbons producer
reached a restructuring deal with a private fund, a senior Alfa
executive said on Thursday.
Pacific PRE.TO in April reached a deal with some of its
debtholders, including the investment fund Catalyst Capital
Group, to convert almost all of its debt to equity as it looks
to fight a prolonged slump in oil prices. The deal excluded
Alfa, its biggest shareholder.
The chief executive of Alfa ALFAA.MX , Alvaro Fernandez,
told reporters the deal turns Pacific's creditors into the
effective owners of the company, diluting to "zero" the
participation of shareholders.
"We in our results are now taking it as if it were worth
zero, this investment," he said.
The book value of Alfa's investment in Pacific fell to $38
million at the end of the first quarter due to the drop in oil
prices, versus some $1 billion it had invested in the firm to
reach a 19-percent ownership stake.