Banco Santander has launched place among the investment funds the mega-credit of 700 million that it granted to Cobra Group for its latest offensive in Brazil, according to several market sources consulted by La Información. The process is in a very early stage. The presiding entity Ana Botin It has barely had the first contacts with a very limited group of investment firms, possible candidates to be part of the receivership that the bank is designing. Banco Santander has not commented on the questions of this medium.
The bank gave oxygen to the old subsidiary of ACS -today in the hands of the French company Vinci- for the purchase, through its energy division Carmo Energyfrom eleven oil concessions to Petrobras, a hydrocarbon giant controlled by the Brazilian State. The amount of the operation reached $1.1 billion (more than 1,090 million euros).
Grupo Cobra is becoming a major player in Brazil by showing off its wallet. With the aforementioned transaction, the former ACS services subsidiary took control of the so-called Carmopolis cluster, which includes a package of the assets of the Sergipe-Alagoas basin. Specifically, around 3,000 oil extraction wells, as well as oil and natural gas processing, storage and transportation infrastructure.
Due to its scope, the agreement sealed at the end of 2021 was the largest transfer operation of oil and natural gas assets in the history of Brazil. According to the information communicated to the market in December of last year, the transaction was structured in three payments, beginning with an initial disbursement of $275 million and others 550 million at the close of the sale. Cobra promised to contribute other 275 million twelve months after signing the agreement.
Banco Santander played a key role as a creditor of the industrial services group. Now, the entity wants to reduce its risk. Initially, the bank will focus the search on investment funds, instead of prioritizing a banking syndicate. This gives Santander greater flexibility when it comes to structuring the operation since, in general, investment firms are in a position to offerr longer amortization schedules.
The entity has focused its search on investment funds given the greater flexibility they can offer compared to banks
Banco Santander’s proposal is likely not to fit a certain profile of investors, given the reluctance of many funds to increase their exposure to the hydrocarbon market, due to its difficult fit with the ESG criteria (environmental, social and good governance). The possible buyers of the debt also will scrutinize the risk of the multinational oil company Royal Dutch Shell Plc (Shell)one of the clients (off-takers) of the assets that Cobra bought due to its role in the production chain of the wells of the Carmópolis cluster.
Banco Santander’s activity in Brazil is going through a period of particular turmoil in the heat of the bank’s commitment to renewables. The entity is working to acquire 500 million euros of ammunition for the financing of photovoltaic projects in the Latin American country, the largest individual market for the company chaired by Ana Botín. With this objective, Santander has requested a loan of 200 million euros to the European Investment Bank (EIB)as reported by La Información last July.