Pecsa acquired downstream operation of ChevronTexaco in Peru

Peruana de Combustible S.A. (Pecsa) acquired the downstream fuel business operation of ChevronTexaco Petroleum Company (ChevronTexaco) in the Republic of Peru. The acquisition was implemented by means of the transfer to Pecsa of the total equity interest of ChevronTexaco in ChevronTexaco Petroleum Company SRL and in ChevronLubricants del Perú SAC.

Alberto Rebaza, partner at Rebaza & Alcázar Abogados Financieros, commented to Latin Counsel that ?this transaction joins a trend of acquisitions of domestic companies owned by multinational entreprises undertaken by Peruvian investors.? Alberto Rebaza highlighted that ?the acquisition of ChevronTexaco Petroleum Company S.R.L and of ChevronLubricants del Perú S.A.C. by Pecsa follows other M&A transactions in different commercial sectors, such as insurance and industrial businesses, referring to the largest soft drink bottles producer in Peru.?

Andrés Kuan-Veng, senior associate at Rebaza & Alcázar Abogados Financieros added that ?the acquisition was structured as a leveraged buyout of the target companies. In this context, in addition to the usual negotiation process involved in an M&A to be conducted between buyer and seller, a key element of this transaction was the mezzanine financing provided to ChevronTexaco Petroleum Company SRL by Darby Delaware Mezzanine Holdings LLC (an investment fund based in Washington DC, in which Nicholas Brady acts as Chairman).? Andres Kuan-Veng highlighted that ?this is the first mezzanine financing of this relevance ?debt structure that involves different yields, maturities and risk variables within the same financing- provided by a foreign investment fund to a Peruvian company.?

Rebaza & Alcázar Abogados Financieros, acted as Peruvian counsel to Pecsa with partners Alberto Rebaza and Juan José Cárdenas (tax matters) and associates Andres Kuan-Veng, Anahi Com and Eric Franco. Curtis, Mallet-Prevost, Colt & Mosle LLP, with partners Susan Pollack and David Bayrrock, acted as US counsel to Pecsa in matters related to the financing provided by Darby.

ChevronTexaco was represented by John K. Wyma (senior counsel of the corporation), Sarah Flanagan (counsel of the corporation) and Pablo Meneses (in house legal counsel of ChevronTexaco Petroleum Company SRL).

Estudio Luis Echecopar García acted as Peruvian counsel to Darby, with partner Ismael Noya and associates Marco Alarcon and Juan Carlos de los Heros. Orrick, Herrington & Sutcliffe LLP acted as US counsel to Darby with Jonathan W. Haddon (Of Counsel) and associate Sebastian Deschler.

Barrios, Fuentes, Urquiaga Abogados was hired by ChevronTexaco to review the compliance of ChevronTexaco Petroleum Company SRL and Chevron Lubricants del Peru SAC for the transaction. Partner German Barrios and associate Fernando Ramos were the lawyers involved in said corporate work.