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State Grid agreed to buy 25% stake in REN

Feb. 6, 2012 (China Knowledge) - State Grid Corp of China, the nation's largest power supplier, has received approval from the Portuguese government to acquire 25% equity interests of Portugal's power supplier Redes Energeticas Nacionais or REN at a consideration of EUR 387 million.

The Chinese buyer offered EUR 2.90 apiece for the acquisition, a 40% premium on the target firm's closing price on February 1, said Portugal's Treasury Secretary Maria Albuquerque.

As a part of the deal, State Grid will guarantee EUR 1 billion of fundraising to reduce REN's debt/asset ratio, said a person familiar with the matter, adding that REN's short-term refinancing requirements to 2015 reach about EUR 1.6 billion.

In Portugal's EUR 78 billion financial rescue package, the Portuguese government has agreed to sell a 40% stake in REN to international bidders with the remaining 15% interests sold to Oman Oil for EUR 592 million.

Last month, China Three Gorges, the state-owned operator of the world's largest hydropower project, spent EUR 2.7 billion for a 21% stake in Energias de Portugal and promised to offer a EUR 8-billion package in investment and finance contracts, sources reported.






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