GDF Suez may sell 30% stake in Bahrain plant

Stake held by French gas and power group said to carry enterprise value of $200m
GDF Suez may sell 30% stake in Bahrain plant
POWER PLANS GDF Suez has several projects in the Middle East spanning countries such as the UAE and Oman (Bloomberg Images)
By Reuters
Thu 28 Jul 2011 05:01 PM

French utility GDF Suez plans to sell its 30 percent stake in Bahrain's Al Hidd power and water plant to meet a regulatory requirement following its acquisition earlier this year of International Power , two banking sources said.

Japan's Sumitomo Corp also holds a 30 percent stake in the plant while International Power holds the remaining 40 percent.

Bahrain's government now wants GDF to reduce its effective 70-percent holding, the source said, but the IP stake is not being considered for selling.

The 30 percent stake has an enterprise value of $200m and GDF has hired HSBC as an adviser, the sources said.

An HSBC spokesman in Dubai declined to comment as did GDF's press office in Paris.

Sumitomo also has the right to acquire the stake before any other party and is likely to be a buyer from GDF, one of the sources said.

"It's a good asset and this deal will go through. It may be Sumitomo or some other buyer but there's definitely a lot of interest," the source said.

The original purchase agreement, which was signed in 2006 with the Bahrain government for $738m, was the biggest privatisation project in the country's history at the time.

The joint venture planned an additional desalination plant, taking total project costs to $1.25bn.

GDF, owner of the largest gas transport network in Europe, is also the top shareholder in the $2.1bn Al Dur power and water project in Bahrain with a 45 percent stake.

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