• Mexico's Alfa made fresh bid for Colombia-based co. last week
  • Pacific has failed to make bond interest payments this year

A bid by Mexican conglomerate Alfa SAB for Pacific Exploration & Production Corp. will wipe out shareholders’ equity in the Colombia-based oil producer, according to people with knowledge of the matter.

Alfa made a fresh bid for control of the beleaguered driller last week with an offer that includes a loan of $500 million, the people said, asking not to be identified because the deliberations are private.

Pacific declined to comment. Alfa did not immediately reply to an e-mail seeking comment. A decision on the sale and restructuring process of Pacific is being led by financial advisory firm Lazard Ltd., with a proposal by Pacific co-chairmen Serafino Iacono and Miguel de la Campa among the list of bids, the people said.

Pacific failed to make bond interest payments in January and March. It has struggled after a series of deals in recent years ballooned debt before oil prices plunged. Alfa has a 19 percent stake in Pacific and is its largest shareholder after O’Hara Administration Co.

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