It's a new year, and with that comes a new corporate structure for Petrominerales Ltd. , the TSX-listed owner of oil assets in Peru and Colombia.
In November Petrobank Energy and Resources Ltd., which owns 66 per cent of the company, announced it would finally spin Petrominerales out to be a standalone business. That transaction officially closed just as 2011 started.
Through the reorganization, Petrobank received TSX-listed shares for its ownership, which drastically increases the company's public float. The spinout was hailed by analysts because a bigger float should increase liquidity. Before the deal, it was common to see less than 200,000 Petrominerales shares trade hands every day.
As an added bonus, Petrominerales now qualifies for inclusion in the S&P/TSX Composite Index, which makes it an even more attractive stock because index funds and the like will need to hold it. A Colombian Stock Exchange listing is also in the works, which could prop up pension fund demand on that continent.
Petrominerales also announced Tuesday that the company has secured its first credit facility as a standalone entity. The $200-million agreement has a three-year life.