Funds Managed by Oaktree to Acquire Interest in Hess Energy Trading Company

NEW YORK--()--Hess Energy Trading Company LLC (“HETCO”), a leading global marketer and trader of energy commodities, today announced that an affiliate of funds managed by Oaktree Capital Management L.P. (“Oaktree”), a leading global alternative investment management firm, is acquiring the interest in the firm held by Hess Corporation. HETCO, which will be renamed in due course, is led by Stephen Hendel and Stephen Semlitz, founding partners, and Guy Merison, partner, all of whom will remain in their current positions. Following the close of the transaction, Oaktree will be the only outside investor in HETCO.

“Oaktree’s investment in HETCO will allow us to build on our existing successful activities in the energy space and expand our business across various commodities markets. In particular, access to additional investment capital will provide us an incremental capability to strategically expand our reach and portfolio.”

Under the terms of the transaction, Oaktree will provide initial working capital to HETCO. In addition, Oaktree has committed up to $500 million of additional capital for HETCO to make potential new investments in the commodity space. Other financial terms of the transaction were not disclosed. The transaction is expected to close in the first quarter of 2015.

Stephen Hendel said, “We are pleased to forge a relationship with Oaktree, providing us with a world class partner with exceptional financial strength and an extremely strong platform for further expansion of our business. We have enjoyed a long and fruitful relationship with Hess Corporation and we are now delighted to be moving into a new phase of our business in the partnership with Oaktree.”

Stephen Semlitz said, “Oaktree’s investment in HETCO will allow us to build on our existing successful activities in the energy space and expand our business across various commodities markets. In particular, access to additional investment capital will provide us an incremental capability to strategically expand our reach and portfolio.”

Bruce Karsh, Co-Chairman and Chief Investment Officer of Oaktree said, “We are pleased to partner with HETCO’s seasoned and talented management team which has a 17 year track record of excellence. There is tremendous opportunity in the energy trading business today as a result of changing market dynamics related to traditional participants exiting the industry. HETCO is well-positioned to benefit from changes to the industry, and to anticipate and capitalize on micro and macro commodity market developments. The company’s focus on risk management and its opportunistic investment strategy based on fundamental research are consistent with Oaktree’s own investment philosophy, making this investment consistent with our fund mandates and our culture. We look forward to working with HETCO and to helping their talented team continue to grow their business.”

Perella Weinberg Partners acted as Financial Advisor to HETCO and Hess in the transaction. Weil, Gotshal & Manges LLP provided legal advice to HETCO and Sullivan & Cromwell LLP provided legal advice to Hess. Paul, Weiss, Rifkind, Wharton & Garrison LLP provided legal advice to Oaktree in connection with the transaction.

About HETCO:

Headquartered in New York, HETCO was formed in 1997 as a joint venture between Stephen Hendel and Stephen Semlitz with Hess Corporation. HETCO is an energy trading company that trades globally throughout the energy space. For more information visit HETCO’s website at www.hetco.com.

About Oaktree:

Oaktree is a leader among global investment managers specializing in alternative investments, with $93.2 billion in assets under management as of September 30, 2014. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities. Headquartered in Los Angeles, the firm has over 850 employees and offices in 17 cities worldwide. For additional information, please visit Oaktree’s website at http://www.oaktreecapital.com/.

Contacts

Media:
Sard Verbinnen & Co
John Christiansen, 415-618-8750
jchristiansen@sardverb.com
or
Carissa Felger, 312-895-4701
cfelger@sardverb.com
or
Oaktree Investor Relations:
Oaktree Capital Group, LLC
Andrea D. Williams, 213-830-6483
investorrelations@oaktreecapital.com

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