Itochu Corp. said it will post a loss of about 38 billion yen ($317 million) on a U.S. shale oil and gas investment amid a downturn in energy prices.
The loss resulting from Itochu’s 25 percent stake in Samson Investment Co. will be booked in the earnings for the fiscal year ended March 31, the Tokyo-based trader said. On a non- consolidated basis, the figure will rise to 43 billion yen. The full-year profit target of 300 billion yen hasn’t been affected, Itochu said.
Itochu joined the 2011 KKR & Co.-led purchase of most of Tulsa, Oklahoma-based Samson as part of the biggest leveraged buyout in the oil and gas production industry at the time, according to data compiled by Bloomberg. It was Itochu’s third- largest acquisition in raw materials, data show.
Itochu, Japan’s third-largest trading house, paid 78 billion yen, worth $1.04 billion at the time, for the equity in family-owned Samson. As a result of the loss, the balance of the investment will decline to 4 billion yen, Itochu said.
Itochu has written down down the value of Samson shares at least twice in two years. The Samson purchase included oil- producing fields in North Dakota and the U.S. northwest, and shale-gas fields in Texas and Louisiana.
Itochu fell 1.6 percent at 10:27 a.m. in Tokyo to 1,281 yen, while the benchmark Topix Index was down 0.9 percent.
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