Temasek Holdings Buys Stake in Repsol SA

Singapore’s Temasek Holdings increased their stake in Repsol SA. Repsol is Spain’s largest oil company; they recently announced the sale of their liquefied natural gas assets to Royal Dutch Shell Plc for US $4.4 billion cash excluding debt. Temasek Holdings purchased 5.04% of treasury shares (64.7 million shares at € 16.01) from Repsol for 1.68 billion SGD (US$ 1.35 billion). Temasek Holdings now holds a 6.3% stake in Repsol.

Temasek Holdings has been steadily augmenting their portfolio in the energy sector, backing both emerging companies and established players.

Tay Sulian, managing director of investment at Temasek Holdings, said: “The investment in Repsol deepens our exposure to the energy sector through a high quality growth-oriented company.”

He added, “The sector is a good proxy for the needs of transforming economies and growing middle-income populations, both of which are part of Temasek’s investment themes. We are pleased to have the opportunity to invest in Repsol, and will continue to look for good, long-term investments in the energy space.”

In May 2012, the government of Argentina’s nationalization of YPF SA exerted stress on Repsol’s financial health. Repsol’s credit rating was on the verge of junk status, a major risk for a capital intensive industry.

For Repsol, the deal with Temasek Holdings was discounted causing a €148 million cash loss for the company. On the other hand, the deal should have a positive impact on the company’s credit rating, while increasing the stability of their balance sheet.

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