GDF Suez announces asset sale in Canada to reduce debt
Heavily-indebted French energy group GDF Suez announced on Monday the sale of 60 percent of its renewable energy interests in Canada worth 1.5 billion euros ($2.0 billion) and the creation of a joint venture with the two buyers.
The sale will enable GDF Suez to reduce its net borrowings by about 1.0 billion euros and to increase the money raised from a programme of asset sales to 3.9 billion euros compared with a target of 5.0 billion euros for this year, the company said in a statement.
The two buyers are the Japanese industrial conglomerate Mitsui & Co, and a consortium headed by Canadian fund Fiera Axium. Each of these two will have an interest of 30 percent.
The assets concerned are mainly wind-power generators and a few solar projects representing in total about 680 megawatts, of which 363 MW are installed and 318 GM are due to come on line in 2013-2014.
Mitsui & Co said the deal concerned seven operational wind-generator parks, three projected parks and two solar parks in the provinces of Ontario, New-Brunswick, Prince Edward Island and British Columbia.
GDF Suez chief executive Gerard Mestrallet said that the fact the French group was remaining as the main shareholder reflected the attractiveness to the group of the Canadian renewable energy industry.
At the beginning of December, GDF Suez said that it was accelerating its policy of selling assets, aiming to raise 11 billion euros in 2013 and 2014, and would also take other steps to reduce its debt which has risen by a third in two years with the acquisition of British company International Power.
The target is to reduce borrowings to 30 billion euros by the end of 2014.
The price shares in GDF Suez was showing a fall of 0.52 percent to 15.20 euros at mid-day. The share had fallen sharply last week after the group downgraded its outlook and accelerated its cost-saving programme.
© 2012 AFP