ANNOUNCED AS TEMPORARYNo
Bailout (capital injection or equity participation)
On 13 April 2016, the government of Mexico announced its decision to provide a state aid of 73.5 billion pesos ($4.2 billion) to its state oil firm Pemex.
Approximately 36% of these state aid funds will represent a standard capital injection (equity contribution). The remaining 64% of the state aid funds will represent a credit facility aimed at helping the company cover its pension-related costs for the fiscal year 2016. In reception of these funds, Pemex commits to reducing its debt by an amount that is equal to this denoted state aid.
Furthermore, in order to further aid the company, the government announced that it would also introduce alterations to Pemex' tax regime--primarily through allowing Pemex to make higher deductions of exploration and extraction costs in its fields. Specifically, the government established that the limits for deductions calculated under shared profits fees would be at least USD 6.10 and USD 8.30 per barrel (referring to shallow waters and onshore operations). However, according to the government, in case the deductions ceiling established in the Hydrocarbons Revenues Act is higher, Pemex may choose to use the prior described ceiling instead. These changes, according to official government resources imply lowering Pemex's tax burden by50 billion pesos (USDin 2.9 billion).
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries
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