Enforceability and Validity
The Guidelines became effective on 9 March 2023 and abrogated those published on 30 January 2017 that established requirements and the procedures to enter into alliances or associations in which corporate and management control or operations were transferred, as well as its subsequent amendment, published on 17 December 2020.
The Guidelines state that those procedures initiated prior to their entry into force, will be ruled in accordance with the regulations in force at the time the corresponding procedure was filed.
The purpose of the Guidelines is to establish the requirements and the procedure by means of which the CNH will resolve the following:
1. Evidence of legal, financial, technical, technical, experience and execution capabilities.
CNH will conduct an assessment of the legal, financial, technical, experience and execution capabilities (the "Capabilities") of a potential assignee, contractor or joint obligor in order to: (i) transfer corporate and management control or control of operations; (ii) become part of a contractor; or (iii) modify the capital stock structure of a contractor or participating company that entails the exit of a joint obligor.
It will be necessary to comply with the technical guidelines issued for each bidding process and contained in the bid guidelines through which the respective contract was awarded, or those applicable in the event that the contract was not awarded through a bid process.
For this purpose, CNH will issue the corresponding resolution within a maximum term of 30 business days from the date the request is filed.
2. Assignment authorization
In order to enter into alliances or associations in which corporate and management control or control of operations is transferred, the prior CNH authorization will be required. Among the requirements to obtain such authorization, it will be necessary to submit the resolution showing that the potential assignee complies with the Capabilities, following a procedure that will be carried out according to what is established in the previous item.
CNH will review if the requirements necessary to authorize the assignment are complied with by the applicant. Likewise, it will evaluate that the assignment does not affect the Capabilities of the Contractor to continue with the conduction of the petroleum activities.
Once the assignment request is received, CNH will forward it to the Ministry of Energy ("SENER") and SENER will have a term of 20 business days after receiving the assignment request from the CNH to express its disagreement, if any. CNH will issue its resolution within 10 business days after the end of the term granted to SENER. In the absence of a pronouncement regarding the assignment request, the answer to such request will be deemed to be favorable (affirmative ficta).
3. Amendment to the Contractor's conformation
Regardless of the provisions of each contract, in the event of an assignment of participating interest that modifies the conformation of the contractor and that does trigger a transfer of corporate and management control nor control of the operations, the contractor must request the consent of the CNH to execute the amendment agreement reflecting the new conformation of the contractor.
For this consent it will also be necessary to submit, among other requirements, the resolution by which the Capabilities are evidenced.
4. Liens on the participation interest
The imposition of a lien over a part or all of the participating interest will require the prior and written consent of the CNH. The Guidelines establish the requirements and information that must be submitted to request this consent, among which are: (i) documentation and general data of the potential creditor; (ii) characteristics of the lien object of the authorization; (iii) description of the corporate consequences that the lien may trigger in the contractor or participating company.
Once all the requirements of the request for authorization to create the lien have been met, the CNH will issue a resolution within 20 business days after receipt thereof. In case the CNH does not issue a resolution within this term, the afirmativa ficta will also be applicable.
5. Notices of changes in capital stock or ownership interest
- Capital Stock: In those cases in which a change is made to the capital stock structure of the contractor or a participating company, that does not result a transfer of corporate and management control, it will be necessary to give notice to the CNH within 30 calendar days following of its occurrence.
- Participating Interest: In the event that a modification of the participating interest percentages is carried out between participating companies (and that does not result in a transfer of corporate and management control or control of operations), the contractor must notify the CNH within 30 calendar days after its occurrence. At all times, the operator must continue with the minimum participating interest established in the contract or, in its absence, in the bidding guidelines.
Our Firm will be happy to discuss in detail how these Guidelines may impact your operations, as well as provide you a potential legal analysis and customized strategies for your business.