ANGOLA – Global commodities trader Trafigura is in advanced talks to buy more than 10% of an Angolan general’s stake in its fuel retail arm Puma Energy by the end of the year.

Retired general Leopoldino Fragoso do Nascimento, known as General Dino, holds a 15% stake in Puma via his company Cochan Holdings. Trafigura holds 49% and Angola’s state firm Sonangol 28%.

Puma’s shareholding structure was put together under Trafigura’s former CEO and founder Claude Dauphin, who was close to the former ruling Angolan elite.

However, the Swiss firm’s hopes of listing Puma hit compliance hurdles owing to the general’s presence as a significant stakeholder.

Trafigura has wanted to restructure Puma’s ownership for years but the move to buy out Cochan only began in earnest after Emma Fitzgerald took over as Puma’s chief executive in January 2019.

The move comes as Angola itself is reviewing its assets. The government announced a cross-sector privatization drive last year, including its aim to list state oil firm Sonangol by 2022 and divest its stake in Puma.

Fitzgerald took the helm at difficult time for Puma, which has been loss-making since 2018.

After a McKinsey review, the firm has been selling off assets such as its business in Paraguay and more recently Australian assets which had become a drag on its finances.

Trafigura planned to reduce General Dino’s stake to less than 5% with the aim of attracting more global banks and new equity investment. The deal will not be a pure cash exchange.

Trafigura will likely spend between US$357 million and US$535 million for the stake.

In its 2019 annual report, Trafigura reduced the value of its stake in Puma by US$200 million to US$1.75 billion, valuing the company at US$3.57 billion.

The trading firm has other business links with Cochan, namely a joint venture called DTS Holdings which is the main holding company of DT Group and which focuses on sub-Saharan and Angolan investments.

Puma, which traces its roots to Argentina, has around 3,000 retail fuel stations in Latin America, Africa and Asia-Pacific.