GDF Suez to sell stake in Portuguese power assets

• 11 years ago (2013-08-07)
• Junior Isles

Asia 892 Europe 1089

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GDF Suez SA has agreed to sell 50 per cent of its stake in a selection of thermal and renewable power generation assets in Portgual to Japan’s Marubeni Corp, according to media reports.

Exact terms of the sale have not been disclosed by either party but GDF Suez will continue own half of the Portuguese venture. The Portuguese assets are valued at about €2.5 billion ($3.3 billion) in total, according to sources close to the deal.

The sale will mean a reduction of €900 million in GDF Suez’s net debt once consolidated into the company’s accounts. The assets represent a total installed capacity of 3300 MW, GDF said in a statement, and the transaction is expected to be completed during third quarter 2013.

The utility is seeking an €11 billion reduction in net debt from asset sales over the next two years to reduce borrowings to about €30 billion by the end of 2014.

GDF Suez is currently cutting its power capacity to contain costs as a result of low demand for gas-fired power in Europe. The utility has closed or mothballed around 8600 MW of plants in the region since 2009 and looked to expansion in Asia, Latin America and the Middle East to offset falling European demand. Chief Executive Officer Gerard Mestrallet recently indicated he may pursue further shutdowns or sales.