EIG Prepares New Pacific E&P Bid as Catalyst Faces Hurdle

  • IFC said to be withholding consent to use assets as collateral
  • New offer said to be better than proposal from Catalyst

EIG Global Energy Partners is preparing a fresh bid for Pacific Exploration & Production Corp. by a May 5 deadline, just ahead of a court hearing on the Colombia-based oil producer’s restructuring, people with knowledge of the matter said.

Pacific last month selected a restructuring plan submitted by Canada’s Catalyst Capital Group Inc. The EIG bid will be better, the people said, asking not to be identified because the deliberations are private. In addition, EIG and potentially others plan to urge a Canadian court to restart the selection process because of flaws in the way it was carried out. The hearing is set for May 10. Tom Becker, a spokesman for Pacific, declined to comment.

Under the terms of the Catalyst deal, the Toronto-based company and other creditors will provide $500 million in debtor-in-possession financing secured against Pacific’s assets, according to a April 19 statement.

However, Pacific’s infrastructure assets can’t be pledged to anyone without the consent of the International Finance Corporation since the World Bank unit is a shareholder in the assets, the people said. So far, the IFC hasn’t granted its consent, they said.

A spokesman for EIG declined to comment while a representative for Catalyst wasn’t immediately available. The Catalyst-funded bid was spearheaded by Pacific’s co-chairmen and founders, Serafino Iacono and Miguel De La Campa.

Catalyst could walk away from the deal if they fail to get IFC consent, or provide the funding without receiving collateral. Pacific, Latin America’s largest independent oil producer, failed to make bond interest payments in January and March after a series of acquisitions in recent years were followed by plunging oil prices.

Mexican conglomerate Alfa SAB, EIG and Gran Tierra Energy Inc. were among the bidders for Pacific.

Before it's here, it's on the Bloomberg Terminal.