French utility GDF Suez SA (GDFZY.PK,GDSZF.PK) Monday said it has agreed to sell 60 percent equity interest in its 680MW Canadian renewable generation portfolio to Mitsui & Co. Ltd. and a consortium led by Fiera Axium Infrastructure Inc., for an enterprise value in excess of C$2 billion, or 1.5 billion euros. GDF Suez said the transaction will reduce its net debt by about 1 billion euros.
Mitsui and Fiera Axium-led consortium each will hold a 30 percent interest in the new joint venture. GDF Suez will remain the largest shareholder, retaining 40 percent interest, and will continue to operate and maintain the assets. In addition to its participation in the joint venture, GDF SUEZ will continue to develop its own pipeline of new renewable projects in Canada, it added.
The 680MW portfolio comprises 363MW of operating wind facilities, and a further 317MW of wind and solar capacity, which are expected to start commercial operation between 2013 and 2014. The facilities are located in Ontario, New Brunswick, Prince Edward Island and British Columbia.
As part of the transaction, the company has raised a total of 0.8 billion euros of project finance from Japan Bank of International Cooperation, Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank, Sumitomo Mitsui Banking Corp., and The Manufacturers Life Insurance Co.
Gérard Mestrallet, chairman and CEO of GDF Suez stated, “This is an important new joint venture in which GDF SUEZ will have a significant shareholding, reflecting the continued importance of the Canadian renewable market to the Group.”
GDF Suez said it has now achieved 3.9 billion euros, out of the 5 billion euros expected in 2012 for its asset optimization program.
Earlier this month, the company agreed to dispose a majority stake in its Italian wind energy subsidiary, IP Maestrale, to ERG SpA for an enterprise value of 0.9 billion euros.
On December 6, the company had warned that its earnings will fall next year due to a challenging energy outlook in Europe.
In Paris, GDF Suez shares are currently trading at 15.25 euros, down 0.16 percent.
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by RTT Staff Writer
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