September 11, 2019 / 1:40 PM / 5 months ago

Mexico's Pemex to receive $5 bln government injection to reduce debt

MEXICO CITY, Sept 11 (Reuters) - Mexican state oil company Pemex said on Wednesday that the government would inject $5 billion into the firm, another move to shore up finances for world’s most indebted oil company.

Pemex plans to use the capital for the prepayment of bonds that mature in 2020 and 2023. It also will issue new bonds in maturities of seven, 10 and 30 years to refinance short-term debt.

“Proceeds from this transaction will be used to ensure a reduction in the outstanding balance of Pemex’s debt,” the company said in a statement.

Mexican President Andres Manuel Lopez Obrador said this week that he sees a brighter future for Pemex as production stabilizes, despite warnings from credit ratings agencies that the company is teetering on the verge of a downgrade.

Pemex has had 14 straight years of slumping output due to a mixture of ageing fields and a lack of investment. (Reporting by Daina Beth Solomon; Editing by David Gregorio)

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