Pátria Investimentos fund closed an agreement to purchase the hydroelectric plants of British company ContourGlobal in Brazil for $313 million, including debt – Pátria will pay $162 million. The assets traded have an installed capacity of 168 megawatts (MW).
The deal, expected to be completed in the second quarter, was a first step in ContourGlobal’s plan to monetize its renewable energy assets in the Brazilian market. The divestment of assets is part of the company’s strategy to increase its market capitalization and unlock shareholder value.
In this line, the British company also intends to sell, in the first half of the year, its wind farms in Brazil. Pátria has exclusivity in the transaction. In all, according to information on the company’s institutional website, ContourGlobal operates 598 MW of wind power, including the Asa Branca farm (160 MW), in Rio Grande do Norte, and the Chapada complex (438 MW), in Piauí.
With the acquisition of ContourGlobal’s assets, the fund expands its portfolio of renewables. Pátria is an investor partner of Essentia, which operates in the Brazilian solar and wind energy market, and in Chile’s Latin America Power (LAP).
Pátria declined to comment on the new investment. With $25 billion in assets under management, the fund also operates in the power generation sector through Arke — a joint venture with Shell and Mitsubishi Power, responsible for the construction of the Marlim Azul gas thermal plant (565 MW), in Macaé, Rio de Janeiro.
ContourGlobal said it would still decide whether to use the proceeds from the sale of the hydroelectric to reinvest in new business opportunities or to increase shareholder remuneration. The company, listed on the London Stock Exchange, has a global portfolio of 6.3 gigawatts.
The agreement with Pátria includes nine small plants: Goiandira (27.7 MW), Nova Aurora (21.6 MW), São Domingos (25 MW) and Galheiros (12 MW), in Goiás; Presidente Goulart and Alto Fêmeas (18.7 MW) and Sítio Grande (23 MW), in Bahia; Pirapetinga (19.8 MW) and Pedra do Garrafão (20.3 MW), in Rio. The plants were purchased in 2016 by British company Neoenergia and account for less than 3% of ContourGlobal’s global revenues.
Commenting on the sale, ContourGlobal’s chief executive Joseph Brandt said, in a statement, that the deal is consistent with efforts to “unlock the value of undervalued assets in the portfolio.” The negotiation with Pátria does not include ContourGlobal’s portfolio of cogeneration thermoelectric plants in Brazil, which totals 76.1 MW.
For the coordinator of the Electric Sector Study Group (Gesel), at the Federal University of Rio de Janeiro (UFRJ), Nivalde de Castro, the acquisition reinforces Pátria’s interest in renewables and shows the liquidity of the domestic market. According to him, the country is well positioned to attract investors because it has a “consistent regulatory framework.”
The sector’s revenue predictability also contributes to providing liquidity to assets. Mr. Castro believes that purchases and sales of renewable assets tend to grow, as companies define strategies in the energy transition. “Renewables are gaining great importance in the energy transition, assets have increased in value, so movements of this type become natural.”
Source: Valor international