The Mexican government will help state-owned oil company Pemex to pay off debt this year by deferring approximately $2bn in taxes owed by the company to the state, Mexico’s deputy finance minister Gabriel Yorio said on Thursday
Pemex has already paid off around $6bn in debt for this year and has another $2.5bn left, Yorio told Reuters at the International Monetary Find and World Bank spring meetings. The company had a financial debt totalling nearly $108bn at the end of 2022 and pays a profit sharing rate, which effectively a tax paid to the government, of 40%.
Go deeper with GlobalData
Delaying Pemex’s payments of the profit sharing rate should allow the company to free up approximately $2bn in cash flow, Yorio said.
“We can do this quickly to provide liquidity to Pemex, not through a capitalization, but by allowing it not to immediately pay the royalty, the profit sharing rate,” said Yorio. “That roughly gives them $2 billion in cash flow.”
Mexico’s President Andres Manuel Lopez Obrador has controversially staked his reputation on reviving Pemex, which has been an important pillar in Mexican energy security since its creation in 1938.
See Also:
Yorio also said that the Mexican government would not need to issue debt to finance a $6bn deal, finalised earlier this month, to purchase 13 power plants from Spanish energy giant Iberdrola. The deal will boost the state’s power utility Comision Federal de Electricidad market share to nearly 56% of Mexico’s total power generation, up from approximately 40% currently.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataLeftist nationalist Lopez Obrador has called the deal a “new nationalisation”, Reuters said. Yorio said “the cost that we agreed with the sellers is at the lower end of a range of prices we identified using different methodologies”. He added that future cash flows generated by the energy assets would help pay back investors.
