Petroperú, the state oil company of the South American country, has asked the government to study a possible declaration of bankruptcy in the face of serious solvency and liquidity problems that derive from over-indebtedness.

The Petroperú shareholder meeting made the request to the government through a statement in response to the serious crisis and whose management they consider unsustainable.

The shareholders detailed that “the overindebtedness of the state company has deteriorated to the extreme its solvency and liquidity ratios.”

Among the reasons for the company’s over-indebtedness, shareholders point to the construction of the New Talara Refinery (NRT), whose cost was double what was budgeted, US$5 billion.

They added that because the Government is a 100 % shareholder in Petroperú, it faces three options: “continue to inject capital, decide on a deep restructuring, or accept its bankruptcy and/or liquidation with the legal and financial obligations that could be faced.”

In May, the crisis that the state oil company is going through was announced. The solution is still pending. The board of directors has indicated that if they opt for a deep restructuring, “an injection of capital would be necessary to carry out organizational efficiency actions that would be implemented with the support of a firm with proven international experience to achieve stabilization that would have to ensure the attraction of private capital to Petroperú to strengthen its transformation.”

M.Pino

Source: DW

(Reference image source: Unsplash+, in collaboration with Getty Images)

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