Business | Investment
IPIC buys 2% stake in Portuguese firm
Abu Dhabi government-owned energy investment company IPIC said on Wednesday it acquired a two per cent stake in Energia De Portugal to pursue investment opportunities jointly in the power and water sector.
- Reuters
- Published: 01:00 April 11, 2008
Abu Dhabi: Abu Dhabi government-owned energy investment company IPIC said on Wednesday it acquired a two per cent stake in Energia De Portugal to pursue investment opportunities jointly in the power and water sector.
International Petroleum Investment Co invests in oil-related projects for the government of Abu Dhabi.
"The acquisition forms part of IPIC's current diversification plans," a statement from IPIC said without giving the value of the deal.
"It marks the entry of IPIC into the utility sector in which a partnership with a leading global utility player, such as EDP, will allow both companies to pursue investment opportunities in the rapidly expanding IWPP (independent water and power projects) sector, especially in the Middle East North Africa region," the statement said.
The cooperation is intended to create opportunities in the field of conventional and renewable energy generation and distribution in the Mena, Iberia, and broader Asian regions, the statement said.
"It is expected to facilitate EDP's engagement with leading gas producers in the Middle East; and promote interactions between EDP and companies within IPIC's portfolio that are active in the energy areas." IPIC's investments are valued at more than $12 billion, and the company holds shares in Hyundai Oilbank in Korea, Gulf Energy Maritime in Dubai, Cepsa in Spain, Borealis & OMV in Austria, Oman Polypropylene in the Sultanate of Oman, Parco Refinery in Pakistan, Sumed Company in Egypt and Cosmo Oil in Japan.
EDP is a leading utility in the Iberian Peninsula, with 10.5 million customers and 15,894 MW installed capacity. It is active in conventional, hydro, and renewable power generation, especially wind energy in Europe, the US and Brazil.
Financing
Analysts said EDP could turn to IPIC to finance its renewables unit if it decides not to carry out its IPO. EDP is planning to float 20 to 25 per cent of its renewable unit in June.
However, EDP chief financial officer Nuno Alves told Reuters last week that if the operation was cancelled EDP's options would include finding one or two partners that could buy five to 10 per cent of its renewables unit each.
"It [EDP] has been relatively silent around the company's IPO which remains planned for the second quarter of 2008," Dexia said in a research report.
"The current deal with IPIC explicitly mentions collaboration in renewable energy which could imply that EDP could have already identified its private [financial] partner here."
Portuguese daily Diario Economico cited unnamed sources as saying yesterday that IPIC "promises to be one of EDP's great trump cards if the IPO of its renewables unit does not go ahead due to the instability in financial markets."
Credit Suisse added in a research note yesterday that "EDP could be looking to sell part of its renewables unit via a private placement as an alternative to the IPO."
Last year EDP also signed a strategic agreement with Algerian energy company Sonatrach, whereby the latter took a 2.03 per cent stake in EDP and will supply the Portuguese company with up to 1.6 billion cubic metres of natural gas a year.
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