LONDON - Singapore’s sovereign wealth fund Temasek Holdings said on Monday that it had increased its stake in the Spanish energy company Repsol in a deal worth around 1 billion euros, or $1.3 billion.
The announcement is the latest effort by Repsol to ease pressure on its credit rating after Argentina nationalized the company’s 57 percent stake in the local energy firm Repsol YPF, which had provided large returns for its parent company.
Repsol agreed last week to sell a number of natural gas assets to Royal Dutch Shell for $4.4 billion in a bid to reduce the Spanish company’s debt burden. Repsol said the deal would reduce its outstanding net debt by half, to just under $3 billion./p>
Under the terms of the latest deal, Temasek will increase its holding in Repsol by five percentage points, to 6.3 percent, after Repsol sold shares to Temasek at a slight discount to its closing share price on Friday.
“The investment in Repsol deepens our exposure to the energy sector,†Tay Sulian, a managing director at Temasek, said in a statement. Shares in Repsol rose 2.3 percent in early afternoon trading in Madrid on Monday.
In response to Respol’s efforts, several of the international rating agencies, including Moody’s Investors Service, recently have revised their outlook on Repsol’s debt from negative to stable.
Several Middle Eastern and Asian sovereign wealth funds have acquired sizable minority! stakes in large American and European companies since 2007, though not every deal has been profitable.
After investing around $1.5 billion in the British bank Barclays at the height of the financial crisis, Temasek later sold its stake in the firm at a loss in 2009.
Temasek also has several other energy bets in its portfolio, including Chesapeake Energy, which has been shedding assets to reduce debt resulting from a decline in energy prices in the United States.
