GDF Suez (GSZ) SA is considering a sale of a stake in its German natural gas storage facilities as Europe’s biggest utility by market value seeks to pay off debt, according to three people with knowledge of the matter.
The 40 percent stake in Storengy Deutschland GmbH may fetch about 500 million euros ($605 million), said the people, who asked to remain anonymous as the company’s plans are private. GDF presently owns all of the company.
GDF Suez, based near Paris, is selling assets to help finance its takeover of International Power Plc, which allowed the company to expand in Asia and Latin America, where demand for energy is outpacing Europe. A sale of the stake would be a retreat from Germany for GDF Suez, which acquired storage sites from Exxon Mobil Corp. (XOM:US) and Royal Dutch Shell Plc (RDSA) last year.
GDF Suez agreed in January last year to buy five underground gas storage facilities and a stake in a sixth in a deal that quadrupled its market share in Germany to 10 percent, according to a statement from the utility at the time. The value of that transaction, which wasn’t officially disclosed, came to nearly 1 billion euros, two people familiar with the matter said then.
GDF Suez Chief Executive Officer Gerard Mestrallet plans to sell 3 billion euros of assets following the acquisition in April of the 30 percent it didn’t already own in London-traded International Power.
The company “will choose assets with limited contribution to the bottom line,” Chief Financial Officer Isabelle Kocher said on an April 16 conference call with analysts.
Storengy Deutschland plans to invest more than 1 billion euros to add more than 2 billion cubic meters of storage capacity in the next 10 years, according to its website.
The sale of a stake in Storengy Deutschland would follow other deals in which the utility took on partners in businesses requiring investment. GDF Suez agreed last year to sell a 30 percent stake in its exploration and production unit to China Investment Corp. for 2.3 billion euros to cut debt and expand in high-growth markets.
The utility also sold a 25 percent stake in French natural gas distributor GRTgaz SA to CNP Assurances (CNP) SA and state-owned Caisse des Depots et Consignations for 1.1 billion euros.
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