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Exterran Holdings announced its Venezuelan subsidiary has completed the sale of assets nationalized in 2009 to PDVSA Gas for total consideration of approximately US $442 million.
Exterran received an initial payment of approximately $177 million in cash at 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 3Q 2016.
The net proceeds from the sale of these assets, when combined with the net proceeds of approximately $112 million from the March 2012 sale of Exterran’s Venezuelan joint venture assets which were also nationalized in 2009, total in excess of $500 million.
Exterran intends to use the initial proceeds received from the sale of its Venezuelan subsidiary’s assets (net of the $50 million to repay insurance proceeds previously collected) of approximately $127 million, as well as the remaining proceeds it is due to receive from both transactions in the principal amount totaling approximately $335 million, as such proceeds are received, for the repayment of indebtedness and for general corporate purposes.
As a result of the nationalization of its Venezuelan subsidiary’s assets, Exterran recorded asset impairments during the year ended Dec. 31, 2009, totaling $329.7 million ($379.7 million excluding the insurance proceeds of $50 million). During the year ended Dec. 31, 2009, Exterran also recognized an impairment of approximately $90 million to write off its investment in the joint ventures.
Exterran has agreed to suspend the arbitration proceeding previously filed by its Spanish subsidiary against Venezuela in connection with the nationalization of its Venezuelan subsidiary's assets, pending payment in full by PDVSA Gas of the purchase price for these assets.