Tag Archives: Alfa

ALFA wants to spend billions of dollars on this

Thanks to the indispensable Otto Rock, always with his ear to the ground for community (ahem) issues, I hear about this situation in Puerto Gaitan.

Following several days of protest around the Pacific Rubiales offices in Puerto Gaitan, Meta, a group of about 60 indigenous people entered and took over the multinational’s premises. The natives of the community Vencedor-Pirirí arrived with clubs and bows to demand that Pacific fulfill agreements it had with them, including maintenance of the Puerto Gaitan-Rubiales road, schools, and health centers. The situation in the morning became tense over the situation of Pacific employees, so the police intervened.

A police officer goes on to explain that some workers were briefly held captive until the police moved in. The host comes back to say that several vehicles have been burned in the protest.

In other news, a pal in Bogotá says Pacific has already taken its name down from its headquarters building, and I heard third-hand that signs in the oilfields are being replaced with signs that don’t have Pacific’s name. If anyone could get me a photo of either of those, I’d be quite grateful. I’d be happy to post it here with or without attribution, your choice.

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Alfa’s financial investment ($PRE.to, ALFAA.mx)

ALFA, a big Mexican conglomerate, said in May it had bought 31,437,700 shares of Pacific Rubiales Energy Corp. (PRE.to), or 10% of the company. It disclosed after buying some shares for $18.43, which at the time was a low price for PRE.

Then, in August, Alfa announced it had bought 9 million shares of PRE.to at $21 a share, bringing its total holding to 17%.

We don’t know exactly how much Alfa spent on its PRE.to shares, but we know from Canadian regulatory filings that from May 20 to August 20, Alfa paid an average $21.03 per share, or $489 million.

At that point, things were looking good. Those 53,657,900 shares closed that day at $21.65 apiece, for a total value of C$1,162 million.

Price action since then:

Screen Shot 2014-10-06 at 2.36.47 PM

At the current price of $17.88, that decline works out to a paper loss of $200 million on Alfa’s shares since that Aug. 20 press release. (From $1,162 million to $961 million. Feel free to check my math, I failed basic arithmetic.)

I’m no expert in trading patterns, but I have a theory here.