Exterran Closes Venezuela Nationalization

Sold Venezuelan assets nationalized in 2009 for $442 million.

Exterran Holdings Inc. (NYSE: EXH) on Aug. 8 reported that its Venezuelan subsidiary has completed the sale of assets that were nationalized in 2009 to PDVSA Gas S.A. for about $442 million.

According to Exterran, it received an initial payment of about $177 million in cash at the closing -- $50 million of which will be used to repay insurance proceeds previously collected under the policy Exterran maintained for the risk of expropriation -- and is due to receive the remaining principal amount of approximately $265 million in periodic cash payments through the third quarter of 2016.

The net proceeds from the sale, when combined with the net proceeds of about $112 million from the March 2012 sale of Exterran's Venezuelan joint venture assets, which were also nationalized in 2009, add up to more than $500 million. Regarding the March 2012 joint venture asset sale, Exterran received $37.6 million at the closing and $4.7 million in June 2012 as an installment payment. It will receive the remaining $70 million in periodic cash payments through the first quarter 2016.

Exterran intends to use the initial proceeds received from the sale of its Venezuelan subsidiary's assets and the remaining proceeds it is due to receive for the repayment of indebtedness and for general corporate purposes.

Exterran has agreed to suspend an arbitration request filed by its Spanish subsidiary against Venezuela in connection with the nationalization of assets, pending payment in full by PDVSA Gas of the purchase price for these assets.

The joint ventures have agreed to suspend previously filed arbitration proceeding against Venezuela in connection with the nationalization of the joint ventures' assets, pending payment in full by PDVSA Gas of the purchase price for those assets.