Gas Natural Fenosa agrees the sale of its stake in gas distribution in Colombia to the Canadian fund Brookfield
- The operation is estimated to have a positive impact on the company’s results in 2017 of approximately 350 million euros after tax.
- The Canadian fund agrees to acquire 59.1% of GAS NATURAL S.A. ESP for 482 million euros.
- This decision does not affect the group's wish to maintain an open dialogue with Colombian authorities regarding its subsidiary Electricaribe.
Through Gas Natural Distribución Latinoamérica, GAS NATURAL FENOSA has agreed the sale of its 59.1% stake in GAS NATURAL S.A. ESP to the Canadian fund Brookfield Infrastructure (“BROOKFIELD”), a Colombian company dedicated to gas distribution and retail supply, by means of a process that will also allow minority shareholders to benefit from the offer at the same price as its shares.
The operation is estimated to have a positive accounting impact on GAS NATURAL FENOSA’s results in 2017 of approximately 350 million euros after tax. This figure demonstrates the Colombian company’s growth as, since its acquisition in 1997, its number of clients has increased from 400,000 to almost 3 million, and its distribution network has grown from 5,000 km to currently over 22,000 km.
The economic conditions of the operation imply a 100% enterprise value of 1.005 billion euros, representing an equity price for 59.1% of 482 million euros. Consequently, this translates into approximately 7.3 times the EBITDA and 13.8 times the net profit, in view of the last 12 months.
Rafael Villaseca, Chief Executive of GAS NATURAL FENOSA, affirmed that “the operation comes within the process of reviewing the assets included in the company’s current Strategic Plan”. He also stated that “the sale is taking place at a time in which international investment funds are particularly interested in these types of assets”.
This decision does not affect GAS NATURAL FENOSA's wish to maintain an open dialogue with the Colombian authorities to avoid arbitration proceedings for investment protection, which were required in relation to its invested company Electricaribe. On the other hand, once the Colombian authorities have had one year to experience first hand the realities of the electricity supply to the Caribbean coast, GAS NATURAL FENOSA is insisting for the authorities to revoke the intervention measure.
In this regard, the Chief Executive confirmed that “we will remain open to a friendly negotiation regarding Electricaribe, provided that adequate regulatory conditions are ensured”. The group is pulling together all its efforts to include an agreed, satisfactory and above all, sustainable solution for the provision of the electricity service in the area to Electricaribe clients, employees, creditors and shareholders.
GAS NATURAL FENOSA will present a new roadmap for 2020 next February, together with new results for 2017. The new strategic plan will define strategic priorities for the company and its growth, investment and shareholder remuneration plans for the next years, bearing in mind the evolution of the global macro environment and the future prospects for the energy sector, as well as recent changes surrounding the company.
About Brookfield Infrastructure
Brookfield Infrastructure forms part of Brookfield Asset Management, a global asset management company with around 250,000 million dollars in assets under its management. The company is listed on the New York and Toronto stock exchanges and owns and operates long-term assets in the utilities infrastructure, transport, energy and communication sectors in the Americas, Asia-Pacific and Europe.
About GAS NATURAL FENOSA
GAS NATURAL FENOSA is a multinational leading company in the energy sector, a pioneer in gas and electricity integration, and operates in over 30 countries. The group provides services to nearly 22 million customers on five continents and has an installed power generation capacity of 15.5 GW and a diversified mix of technologies.
Scope and subject: International, Corporate
Madrid, 18 November 2017