At least four international investors presented bids in May for BlackRock and First Reserve’s Los Ramones Phase II Norte and Sur pipeline holdings, according to three sources familiar.
The bidders include:
- Ontario Teachers’ Pension Plan (OTPP) (Canada)
- Engie (France)
- Apollo Global Management (USA)
- ADIA (Abu Dhabi)
Presently, Engie holds a 50% stake in the southern section of the Los Ramones phase II project alongside the sellers. The company also owns a 67.5% stake in the Mayakán Pipeline - Yucatán in southeastern Mexico.
Sempra’s Mexican subsidiary company IEnova owns the outstanding 50% of the northern section of Los Ramones II.
Total capex for the projects in the greenfield stage was USD 1.65bn for the northern section and USD 1.1bn for the southern section.
Canada’s Brookfield and Australia’s Macquarie had also presented indicative bids, one source said, but Inframation could not confirm that those companies presented binding offers last week.
Other companies that the three sources said expressed interest in the asset included Colombian utility Grupo Energía de Bogotá, Canada’s ATCO and Atlantica Yield.
Morgan Stanley is leading the sales process.
In March 2015, US asset managers BlackRock and First Reserve together acquired a 45% stake in the Los Ramones Phase II Norte and Sur pipelines from Pemex for USD 900m. BlackRock is understood to have acquired First Reserve's stake in those pipelines when it acquired First Reserve Energy Infrastructure I and II on 1 February 2017.
According to a March 2018 preliminary prospectus for BlackRock's third Mexican fund, the BlackRock México Infraestructura II fund – ex-Infraestructura Institucional I2 – holds MXN 1.22bn (USD 62.59m at March 2018 exchange rates) of equity in the project and MXN 38.39bn in debt facilities.
Sempra’s Mexican subsidiary IEnova owns a 50% stake in Los Ramones Norte, having upped its original 25% stake by obtaining a further 25% in the project from Pemex in November 2017. As part of the transaction, Sempra paid USD 231m to cover Pemex’s equity and USD 289m for its share of the project’s debt. French utility ENGIE is the 50% owner of the Los Ramones Sur pipeline.
Operations began for Los Ramones Norte in February 2016 and Los Ramones Sur in July 2016.
As an active bidder in the region, ADIA participated in the early bidding for the USD 8.6bn TAG Pipelines sale in Brazil, but dropped out of the GIC-led consortium before final offers. The investor holds a 20% stake in Abertis’ Chilean toll roads and a 36% stake in a gas-fired power plant in Peru.
In Mexico, OTPP holds a 20% stake in the FARAC II - Pacífico Sur and a 20% stake in the Mexico City Northern Bypass - Arco Norte highways.
Apollo Global Management has provided debt financing to two projects in the Latin American region; Glenfarne’s Fontus Hydro Panamanian 30MW Hydro Plants acquisition and the refinancing of AELA’s combined 332MW Aurora, Sarco and Cuel wind farms in Chile, according to Inframation Deals.
BlackRock, Morgan Stanley, Brookfield, OTPP and Macquarie all declined to comment. ADIA, Apollo and Engie all failed to respond to requests for comment.