China Three Gorges (CTG) Corporation has won the race for privatization of Portuguese power company Energias de Portugal (EDP), winning the tender to acquire the 21.35% stake in the company.
The Chinese company offered to pay the highest overall amount for the stake in EDP ‒ US$3.5b for the state’s shares, as well as funding of US$5.2b for EDP’s business activities. The price paid represents a premium of 53.6% against the stock market price on 21 December 2011. Three Gorges also said that it planned to build a wind turbine factory in Portugal, generating around US$650m of exports per year and serving as a bridge for EDP to receive financing from Hong Kong.
The company guarantees US$2.6bn of funding to EDP, and another potential US$2.6bn, and is interested in buying shares in EDP’s wind power assets. In accordance with the envisaged partnership, CTG will invest €2bn until 2015 (including co-funding capex) for stakes between 34-49% in 1.5 GW (net) of operational and ready-to-build renewable energy generation projects, from which €800m in the first 12 months after the closing of the partnership
The Portuguese government said that total investment in EDP and the Portuguese economy may total US$10.4b if funding by Chinese banks is taken into account.