Alpek, a Mexican petrochemical company, has reportedly agreed to sell two of its cogeneration plants in Cosoleacaque and Altamira to British firm ContourGlobal for $801 million. Based on a statement sent to the Mexican Stock Exchange, the company states that it will also issue its shares in the companies that own both the plants Clean Energy cogeneration from Cosoleacaque and Cogeneración de Altamira, S.A. from C.V.

Alvaro Fernandez Garza, General Manager of ALFA as well as the conglomerate owner of Alpek, stated that the operation aligns with the company’s plans to create value for its shareholders and minimize financial leverage. 

Garza further elaborated that in combination with the recent divestment of Axtel’s mass market, the profits from the sale of non-strategic assets surpass over $1 billion. The funds that these transactions have accumulated will significantly strengthen the company’s balance, Garza stated. However, it will do so by reducing the ratio amongst net debt and flow, a proforma to 3Q18, from current 2.7 times to 2.4 times, Garza added.

Under the purchase agreement, the price that was agreed upon will be subject to certain adjustments and must be compensated by the end of the transaction, that is anticipated during the first semester of 2019. Moreover, the deal is subject to customary concluding conditions and conditions comprising organization approvals as well as the Federal Commission of Economic Competition, cite sources. 

According to a report, ContourGlobal mentioned that an additional payment of $77 million represented the value-added tax weighed for the transaction and was estimated to be completely refunded within 12 months of closing.

The report further stated that the plants interconnected with Alpek’s industrial facilities possess a gross installed capacity of 518 megawatts and generate multiple products for its industrial partners including heat, electricity, and steam.

For the record, Alpek is a leading petrochemical company in the Americas, running two business segments categorized as Polyester and Plastics & Chemicals. The company is also the sole producer of caprolactam in Mexico and operates one of North America’s largest polypropylene facilities.