Business

Trafigura paid $390m in share deal with Angola’s ‘General Dino’

Trafigura paid a retired Angolan common $390m for shares in a world gas provider it controls, in a deal whose phrases present a glimpse into the prices of unwinding one of many Swiss commodity dealer’s most profitable but controversial relationships.

The transaction in June final yr was a part of an effort by Trafigura to restructure its enterprise in Angola and to draw extra lenders to the debt-laden Puma Vitality by lowering the shareholding managed by Leopoldino Fragoso do Nascimento — broadly often called “Basic Dino” — from 15 per cent to about 5 per cent.

Dino was a navy adviser to Angola’s former president José Eduardo dos Santos and one of the vital highly effective businessmen within the southern African oil-producing nation in the course of the ultimate decade of the chief’s 38-year rule.

Below dos Santos, partnerships with Dino’s Cochan Holdings LLC helped Trafigura dominate the provision of petroleum merchandise in Angola, producing bumper earnings that supported the Swiss group’s transformation from a scrappy dealer into a world commodity large.

Then in 2017 dos Santos handed energy to João Lourenço, who has since accused the previous president of presiding over many years of corruption and set about reclaiming property from dos Santos’s allies and retendering contracts. Dino was named by Angolan prosecutors final October as a proper suspect in alleged historic graft involving a number of high-profile Chinese language corporations.

Trafigura introduced the deliberate discount in Dino’s shareholding in March 2020 however didn’t disclose the phrases of the deal on the time.

Based on Puma’s 2020 annual report, Malta-registered Trafigura PE Holding Restricted paid Dino’s Cochan $390m in June 2020 for just below 12m shares, equal to roughly $33 a share. The transaction meant Cochan, which then managed 5.04% of the corporate, “ceased to be a major shareholder”, Puma mentioned.

For nearly a decade, Dino had helped Trafigura keep a close to monopoly on the provision of petroleum merchandise into Angola through DT Group, a three way partnership shaped in 2009 by Trafigura and Cochan. As soon as contained in the nation, these merchandise have been distributed to enterprise and retail clients by way of Puma’s community of service stations, airport terminals and marine terminals.

Trafigura first invested in Puma, which now has greater than 7,000 workers in 45 international locations, in 1997. Cochan invested in a number of of Puma’s African operations between 2008 and 2010, in accordance with Puma filings, earlier than changing these shares into an 18.75 per cent stake in Puma in 2010 that was later diluted to fifteen per cent. In 2011, Angola’s nationwide oil firm Sonangol additionally acquired a stake in Puma, whereas Dino sat on Puma’s international board from 2013 to 2020.

Dino’s Puma shareholding and board seat was testomony to the worth of Angola to Trafigura, mentioned Ricardo Soares de Oliveira, a professor at Oxford college who has studied the position of commodity merchants in Angola. “Dino wasn’t only a native intermediary. He, or the Angolan pursuits he represented, had turn into extraordinarily essential.”

He added that after Lourenço took energy it appeared Dino’s shut affiliation with the dos Santos regime had left Trafigura with no alternative however to dilute his position in the event that they wished to have any future within the nation.

Shortly after the management change, Sonangol retendered contracts for the provision of refined petroleum merchandise into Angola, slicing out Trafigura and awarding offers to offer gasoline to Whole and diesel and marine diesel to Glencore.

In an extra signal of Trafigura’s modified place within the county, the Swiss dealer introduced in April that it might in impact withdraw from the gas distribution enterprise in Angola by buying Sonangol’s 32 per cent stake in Puma for $600m earlier than promoting the gas provider’s Angolan property again to Sonangol for a similar worth. 

That transaction valued Puma inventory at $20 a share, whereas a second shareholder transaction in June 2020 valued it at about $19, public data present.

Trafigura directed inquiries to Puma. Puma mentioned the corporate was “comfy it had paid the correct amount” for Cochan’s stake within the enterprise, and that “the valuation used was pre Covid-19 and was according to the worth of Trafigura’s then 49.3 per cent stake in Puma Vitality”.

In its 2019 annual report Trafigura had lowered the worth of its personal stake in Puma to $1.75bn, valuing the gas provider at nearly $3.6bn.

Dino couldn’t be reached for remark.

“To be able to keep in Angola, even in a a lot diminished position, Trafigura wanted to maneuver on past the dos Santos period partnerships,” Oliveira mentioned.

Further reporting by Neil Hume

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