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Trafigura's Puma Energy looks for quick sale of Australian assets - sources

Julia Payne and Clara Denina

LONDON, Nov 28 (Reuters) - Puma Energy, the retail and midstream arm of commodities trader Trafigura, is trying to find a buyer for its fuel stations in Australia by the end of the year and would likely accept a hefty discount to what it originally paid, sources familiar with the matter said on Thursday.

Loss-making Puma, 49% of which is owned by the Geneva-based Trafigura, is under pressure to rebalance its books after a decade-long buying spree.

In 2013 the firm entered the Australian market with the purchase of 360 fuel stations, 222 stores, 81 restaurants and 15 car washes from Ausfuel, Neumann Petroleum and Central Combined Group. Media reports at the time put the undisclosed purchase price at around $850 million for the Ausfuel and Neumann assets.

Sources familiar with the sale said the assets would likely fetch no more than $500 million now, which they said would be a sharp drop in price.

A spokesman for Puma declined to comment.

Earlier this year, Puma's new chief executive hired Mckinsey to review the business and engaged Bank of America to sell some assets. Puma sold its Paraguayan business to Trafigura joint venture Impala Terminals last month for $200 million.

The disposals programme was also aimed at avoiding a downgrade from ratings agencies, but Fitch lowered Puma to BB negative from BB in August citing increased pricing competition and higher fixed costs.

Returns from Puma's historically strongest markets - Angola and Australia - dropped sharply in 2018, pushing the firm into a net loss that has continued through the first half of 2019.

Australia has seen increased competition while Angola devalued its currency.

"Australia remains one of the 10 largest contributors to Puma Energy's volumes and EBITDA, albeit down from being the second-largest historically," Fitch ratings agency said in its downgrade report.

One source said it may find it difficult to find a buyer for the sizeable Australian assets.

"The only problem is that interested bidders, mostly other trading houses which already own assets in Australia, could have issues with Australian antitrust, which is quite tough," one of the sources said.

In 2017, the Australian Competition and Consumer Commission (ACCC) rejected an attempt by London-listed BP to buy Woolworths' chain of petrol stations, arguing that this would cut the number of major rivals selling petrol and reduce the incentive to keep retail prices low.

Fuel refiner and retailer Viva Energy, whose parent company is UK-based energy trader Vitol, could express an interest, the source said. Viva, however, already owns more than 1,000 petrol stations in the country.

The ACCC declined to comment on Puma's sale other than to confirm the firm had a 3% market share of retail sales as of June 2017.

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

Its other shareholders include Angola's state oil firm Sonangol at 28% and Cochan Holdings, which is run by a former Angolan general, at 15%. (Additional reporting by Sonali Paul in Sydney; Editing by Elaine Hardcastle)