The Ministry of Finance of Mexico will granted state oil company Pemex a US$5bn billion rescue package to reduce its US$104bn debt load. The rescue package includes a debt refinancing plan and a US$5bn capital contribution for prepayment of bonds maturing between 2020 and 2023. Pemex will issue new bonds maturing in 7, 10 and 30 years for the refinancing of short-term debt. The company had already been granted several tax breaks and cash support throughout 2019. The Mexican government already budgeted for another US$4.4bn of tax and cash support for the year 2020.
Pemex has been facing financial difficulties in the last 7 years, mainly due to weak hydrocarbon prices, a decrease of its oil and gas production, and the low operating efficiency of its refineries. Despite an increase of 20% of revenues in 2018, the company has a net loss of US$9bn and became the most indebted oil company in the world.
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