Mercuria CFO's interview with EuroTreasurer - "We Have Seen a Flight to Quality"
The CFO of Mercuria Energy, Guillaume Vermersch, describes his financing plans for the Swiss commodity trader and the search for strategic partners
»»Now that the July financing deal is done, what projects are up next?
««We successfully renewed our European revolving credit facility in July for $1.8 billion. Very soon we will be back on the market and looking to renew our $800 million Asian revolving facility, which is denominated in both dollars and offshore renminbi. We really want to diversify our sources of funding. The bank market is the natural choice for financing our activities and we continue to grow the number of our relationships, now with more than 100 banks. We are also developing and fine-tuning our access to the debt capital market (DCM) and were also recently able to secure a private placement with US insurance companies.
»»Do you feel like bank funding is becoming more difficult to obtain?
««We have seen a flight to quality. Basically, the good and strong tier 1 credits, such as Mercuria, have had the benefit of additional support and credit lines brought by the same banks that reduced their balance sheets during the crisis. My only explanation for that is that banks have probably ended tier 2 and 3 credit relationships to refocus on tier 1 companies like us.
»»Why isn’t Mercuria planning an IPO right now?
««We are a relatively young company compared to many of our peers. I think that we have achieved in ten years’ time what it has taken some others 20 or more years to do. We definitely have more room for building and expanding strategic partnerships, which we will do to keep growing before we even begin to approach the public equity market more formally through an IPO. I don’t envision us going for an IPO in the medium term. Maybe one day, but it’s not in the pipeline yet.
»»How far along are you in the search for strategic partners?
««I’m sorry, but that is confidential information. First of all, we think there are mutual and long-term value creation and growth potential for Mercuria and its strategic partners in building a common equity relationship. From an initial list of 15 companies representing different sectors that have expressed strong interest in joining Mercuria’s equity, we have whittled it down to four. And with some of them, we are already quite far along in our discussions. These strategic partners will give our business additional support, while we will contribute to their business systems. This potential portfolio of strategic partners will represent around 20% of our equity. This is all progressing extremely well and is a very exciting and promising development for the company. It is opening many new horizons for us and new growth potential for all of the parties involved. We may eventually have something to disclose between the end of 2013 and the first half of 2014.
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