Singapore wealth fund Temasak has bought a 5% stake in Spanish oil group Repsol for just over one billion Euros, raising its total stake in the company to 6.3%, Repsol said in a release. The operation involves the entire portfolio of Repsol treasury stock at 16.01 Euros per share for a total of 1.036 billion Euros (1.35bn dollars).
The operation, the biggest investment ever made by Singapore in Spain, reflects the confidence which first class international investors have in Repsol's growth strategy, it said in a statement.
Repsol unveiled a new strategic plan in May after Argentina nationalized oil and gas producer YPF, (in which it had a 51% stake) that focuses on boosting oil exploration and reducing its net debt to avoid a possible downgrade by credit rating agencies.
As part of the strategy the company said it would invest 19.1 billion Euros between 2012 and 2016 to develop new exploration projects, mostly in Algeria, Brazil, Bolivia, Russia, the United States, Spain, Peru and Venezuela.
Having an international investor like Temasek on board was “an important support for our management and growth strategy,” Repsol chariman Antonio Brufau said in a statement.
The Singapore wealth fund has been boosting investments in the energy sector, which accounted for 6% of its portfolio in its last financial year that ended in March, up from 3% a year earlier.
Temasek, which has over 115 billion Euros of assets according to Repsol's statement, already has some big stakes in energy groups, including 5% of U.S. oil company Chesapeake and 40% of US oil field services group FTS International, its website showed.
The energy 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,” Tay Sulian, managing director for investment at Temasek, said in an e-mailed statement.
Last Friday, ratings agency Moody's changed its outlook for Repsol to “stable” from “negative”, after the company sold liquefied natural gas assets to Royal Dutch Shell for 4.4bn dollars cash, helping it to cut its debt.