Business Context and Reporting Period
This Form 6-K filing by Transportadora de Gas del Sur S.A. (TGS) is dated April 27, 2018. TGS is the largest natural gas transporter in Argentina, operating the most extensive pipeline system in Latin America. As of December 31, 2017, the company delivered 57.4% of Argentina's total natural gas through 5,706 miles of pipeline (4,745 miles owned, 961 miles operated under regulated tariffs). Substantially all transportation capacity (approximately 2.8 Bcf/d) is subscribed under firm long-term contracts.
Key Financial Metrics and Transaction Details
This filing reports the results of a cash tender offer for the company's 9.625% Notes due 2020. The filing does not provide standard operating financial metrics such as revenue, net profit, operating cash flow, or margins for a specific reporting period.
| Metric | Value |
|---|---|
| Original Principal Amount of Notes | U.S.$255,451,506 |
| Outstanding Principal Amount (pre-offer) | U.S.$191,588,630 |
| Aggregate Principal Tendered | U.S.$80,083,898.25 |
| Percentage of Notes Tendered | Approximately 41.80% |
| Offer Consideration | U.S.$1,035.34 per U.S.$1,000 principal |
| Settlement Date | May 2, 2018 |
Material Changes
The primary material change is the reduction of the company's outstanding debt load following the tender offer. Approximately 41.80% of the 9.625% Notes due 2020 were validly tendered and accepted for purchase. The company intends to finance this purchase with proceeds from a concurrent issuance of new notes. Holders who tendered notes will not receive the scheduled amortization payment due on May 14, 2018.
Outlook, Risks, and Management Commentary
Management announced the successful settlement of the tender offer, with payment to holders scheduled for May 2, 2018. The company retained HSBC Securities, Itau BBA USA, J.P. Morgan Securities, and Santander Investment Securities as dealer managers. The filing includes standard forward-looking statements warning that actual results may differ materially from expectations. It notes that the new notes issued to finance the tender have not been registered under the U.S. Securities Act of 1933 and are restricted from being offered to retail investors in the European Economic Area.
Key Facts for Investor Verification
- Verify the settlement of the tender offer on May 2, 2018, and the receipt of U.S.$1,035.34 per U.S.$1,000 principal plus accrued interest.
- Confirm the terms and pricing of the concurrent new note issuance intended to finance the debt buyback.
- Monitor the impact of the debt reduction on the company's overall leverage and liquidity position.
- Note that the filing does not contain updated operational or financial performance data (revenue, EBITDA, etc.) for the period ending April 2018.