Naturgy splits its business into two listed companies | Economy

The president of Naturgy, Francisco Reynés, in a file image.
The president of Naturgy, Francisco Reynés, in a file image.Eph

The Spanish energy company Naturgy divides its businesses into two listed companies: one that will keep the regulated assets of gas and electricity transportation and distribution infrastructures, and another that will maintain the liberalized energy generation and marketing businesses. “Nothing is going to be sold nor will it have an impact on employment,” the company’s management team has repeatedly denied. “It’s a rearrangement; nothing more. It does not suppose a piece, because nothing is sold and the shareholding structures will be the same”. Each current shareholder will receive one title from each of the two already spun-off firms, with a timetable that he has not detailed.

The operation, communicated in the early afternoon by the National Securities Market Commission (CNMV), still requires the approval of the general meeting of shareholders. And it comes a few months after the Australian investment fund IFM launched a hostile takeover bid on the Spanish one in which it only managed to get hold of just over 10% of the capital, which it has subsequently increased to exceed 12%.

The segregation, has emphasized the executive president of the former Gas Natural Fenosa, Francisco Reynés, has the “unanimous” approval of the entire board of directors. Also with the permission of the IFM representative who has just accessed, this very Thursday, the highest governing body of the company. “We have been working on the project for a few months and it is not an answer to anyone.” Sources close to the investment vehicle confirm to this newspaper that they view the operation with good eyes, both because of the segregation of activities itself and because of the fact that one of its executives is admitted to the energy board, one of its priorities since that last year they undertook the assault on the Spanish capital.

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The market value —and in books— of Naturgy will be divided “into two parts” that will not necessarily be aliquots. “I cannot say how much on each side because it will depend on the debt assigned to each company. We still have to do a detailed analysis”, Reynés added while showing his “conviction” that it is a “good operation for everyone” and that “it will also end up being for the price”. In practice, he has remarked, “we have been working like this for years: almost all the staff work in one of the two businesses, except for those of us in the corporate part”.

Although the distribution of the debt, a key point in an operation of this nature, has not been revealed, it is foreseeable that the regulated activities company bears greater indebtedness, because having more secure and predictable income, it is logical that it has a lower financial cost. Naturgy has announced that the operation will be designed so that the separation is neutral from a fiscal point of view for both the company and its shareholders.

This Thursday, the company has also announced the call for a general meeting of shareholders for next March 15. It will not be on that occasion, however, when the segregation is submitted to the consideration of the owners of the company: sources from the energy company explain that it will still take a few months for all the loose ends to be closed.

He knows in depth all the sides of the coin.


stock market rise

The spin-off project of the Naturgy businesses, announced shortly before the closing of the Stock Exchange —a rarity, since this type of announcement is usually made with the market already closed—, has been welcomed with increases and, above all, with a lot of volatility . As soon as it communicated its plans to the CNMV, the energy company’s shares, which were falling, shot up 5.6% in a few minutes. They then lost some of the ground gained and closed the session at 28.40 euros per share, up 1.72% from Wednesday’s close. Curiously, the plan to divide the company in two was not communicated to the supervisor as privileged information, which has an impact on the price, but as “other relevant information”, of minor importance, despite being an operation of the utmost importance for the shareholders. shareholders.

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The project, baptized as Gemini, represents a “deep reorganization of the company” and “a new step in its transformation process”, as explained to the stock market regulator. “It intends to respond to the important changes that are taking place in the energy sector and that are going to mark its future,” adds the company’s management, while noting that both divisions would be “among the top twenty Ibex 35 companies by market capitalization”. We will have to wait, however, a few months to find out if both companies enter the selective or not. Something to which, however, the president of the company has downplayed.

Two “national champions”

“Two national champions are created. We are talking about two large companies and for Spain it is better to have two companies of this size than just one”, the executive president of Naturgy highlighted. Asked if the Government was aware, Reynés stated that the company “has informed whoever had to inform”. The proposal for the division of the businesses, he has said, has come from the management committee and not from the board of directors.

Last year, the former Gas Natural Fenosa recorded net profits of 1,214 million euros, compared to losses of 347 million reaped the previous year, according to the results presented last Friday. With electricity prices at record highs and energy demand gradually returning to pre-pandemic levels, gross operating profit (EBITDA) rose to 3,983 million euros, 7% more than in 2020. Net debt, for its part, it fell almost 6%, to 12,831 million.

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The company reformulates its board of directors to give entry to IFM

The irruption of the Australian investment fund IFM in the capital of the energy company has forced Naturgy to reformulate its board of directors to accommodate the new shareholder. The highest governing body of the company will remain at 12 members, but with a composition that is quite different from what it had until now: thanks to the resignation of two independent directors, the company will admit one more representative from Criteria (the holding company for investments of CaixaBank and main shareholder, with 27% of the capital), which goes from two to three seats. The Australian investment vehicle, for its part, achieved its long-awaited position on the energy company’s board, which will go to its strong man in Spain, Jaime Siles Fernández-Palacios. Born in 1986, Siles will be the youngest director of the Ibex 35. “We are a serious company: we respect the interests of all shareholders and we had to solve a problem, which was to reconfigure the board to accommodate the representation of all rights”, said the president of the energy company, Francisco Reynés.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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