Acquisition of Duragas

As of April 20th, 2016, the Company reported to this Superintendence that its subsidiary Abastible S.A. (“Abastible”) had reached an agreement with Repsol S.A. (“Repsol”) for the purchase, from the latter, of its Liquefied Petroleum Gas (“LPG”) business in Peru (“Solgas”) and Ecuador (“Duragas”), excluding Repsol’s activities in the Peruvian wholesale market of automotive LPG (the “Transaction”). It was also explained that this transaction had been carried out by means of a share purchase agreement, of the shares that companies related to Repsol had in Peruvian companies Repsol Gas del Peru S.A. (“Regapesa”) and Repsol Gas de Amazonia S.A.C. (“Regaamsac”), and the Ecuadorian companies Duragas S.A. and Servicio de Mantenimiento y Personal S.A. (Semapesa). Later, and by issuing a “Material Fact” dated June 1st of this year, the company informed of the purchase of all the shares of Repsol in Regapesa and Regaamsac. The completion of the purchase of Duragas and Semapesa was still pending, subject to the fulfillment of certain conditions precedent.

 

It is hereby reported that, having met such conditions precedent to complete the purchase of shares of Ecuadorian companies Duragas S.A. and Servicio de Mantenimiento y Personal S.A., Abastible has proceeded, as of October 1st, to acquire all of the shares held by Repsol Butano S.A., a subsidiary of Repsol, in the aforementioned companies. The above Transaction is thus completed.

 

The price paid for the shares of these Ecuadorian companies amounts to US$ 33,000,000, plus cash net of debt for approximately US$ 3,708,839.88 at closing, amount which may be adjusted on a later date based on the definitive financial statements, pursuant to the respective share purchase agreement.

 

As stated in our disclosure of April 20th, Duragas currently sells nearly 405,000 tons of LPG a year, and has a share of 37% of the Ecuadoran market. It has 4 gas storage and filling plants, 1 cylinder repair and maintenance facility, 2,500 tanks installed in clients’ facilities and 13 gas cisterns to supply industrial plants and clients, among other assets.

 

Empresas Copec S.A. expects that the purchase of Duragas will have a positive impact on the results of Abastible, notwithstanding the fact that such impact is yet to be measured.