Conosur Jumps 531% as Venezuela’s PDVSA Said to Exit Argentina

  • PDVSA reportedly in final talks to sell stake to GMM Group
  • Conosur’s debt exceeded equity value in first quarter

Petroleos de Venezuela SA is in advanced talks to sell its 95 percent stake in Argentine fuel distributor Petrolera del Conosur SA to GMM Group SA, according to a person with knowledge of the situation.

Conosur shares jumped 5.6 percent to a record 7.02 pesos at the opening of trading in Buenos Aires on Tuesday. The shares are up more than fourfold since May 23, when Conosur said in a filing that it had received a management offer for PDVSA’s stake with an option to buy. Conosur’s market value is 667.5 million pesos ($44 million).

The deal may be completed as soon as this week, the person said, asking not to be identified because the information isn’t public.

GMM’s offer to manage the company for a year -- including 95 fuel filling stations under the brands Sol and PDVsur and a fuel storage unit -- includes an option to buy after 12 months at a price to be determined at that time. The deal doesn’t include any immediate cash, Conosur said in a May 30 filing in which it confirmed the name of the proposed buyer.

A new owner faces the challenge of cutting Conosur’s deficit, which exceeded its equity value in the first quarter. Grupo Fip, which runs a network of gas stations, would manage Conosur on behalf of GMM Group, the person familiar said.

Javier Davalos, a spokesman for Conosur, didn’t return calls seeking comment. Communication officials at PDVSA didn’t answer calls or e-mails requesting comment. Emilio Gonzalez Moreno, one of Grupo Fip’s owners, also didn’t reply to e-mails and calls seeking comment.

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