GDF Suez to Sell 50% of Portuguese Power Assets to Marubeni

GDF Suez (GSZ) SA said it agreed to sell a 50 percent stake in a package of thermal and renewable power generation assets in Portgual to Japan’s Marubeni Corp. (8002)

Terms of the sale weren’t disclosed and GDF Suez will own half of the venture. The assets in Portugal have a total valuation of about 2.5 billion euros ($3.3 billion), said two people familiar with the transaction.

The sale will result in a total reduction of 900 million euros in GDF Suez’s net debt, after the venture is consolidated into the company’s account on an equity basis. The assets represent total installed capacity of 3,300 megawatts, GDF said in a statement today. The transaction is expected to be completed in the third quarter.

GDF Suez, hurt by lower demand for gas-fired power in Europe, is cutting capacity to contain costs. The utility has closed or mothballed about 8,600 megawatts of plants in the region since 2009 and sought expansion in Asia, Latin America and the Middle East to counter the decline at home. Chief Executive Officer Gerard Mestrallet said last week he may pursue further shutdowns or sales.

The utility is seeking an 11 billion-euro impact on net debt from asset sales this year and next to reduce borrowings to about 30 billion euros by the end of 2014.

Societe Generale SA (GLE) is advising GDF Suez on the transaction with Marubeni, which is based in Tokyo.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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