E.ON turns to Spanish power asset sale in bid to reduce debt


In its latest bid to reduce a $37bn debt, E.ON is asking for bids for its Spanish power business, with plenty of interested parties in the wings.

E.ON employs roughly 1,200 staff in Spain, and owns 3.2 GW worth of coal and gas-fired power plants as well as 1.1 GW of renewable power capacity in the country. It also operates a 32,000 km power power distribution network.

E.ON’s debt problems in southern Europe can be traced to a $14bn gamble on rising energy appetite in 2007, just before energy demand in the EU stalled. The company was forced to write down about half of the assets’ value.

The sale could reach as high as $2.8bn with potential bidders including Australia’s Macquarie private equity firm CVC Capital and Spain’s largest utility Endesa, which is controlled by
Italy’s Enel (ENEI.MI), sources told Reuters.

In addition, two consortia are to table bids, Reuters adds.

Spain’s Grupo Villar Mir has teamed up with First State Investments, the asset management arm of Commonwealth Bank of Australia. The second consortium comprises Spanish gas and electricity firm Gas Natural and Madrilena Red de Gas, a Spanish gas distributor owned by Morgan Stanley Infrastructure the people said.

Earlier this week, E.ON saw its attempt at selling its Italian assets postponed until late November, well past its second quarter initial expectation.

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