Japanese Operators Nab Mexico Power Assets

Spain’s Gas Natural has sold for $1.23bn power generation assets in Mexico to Mitsui and Tokyo Gas. JPMorgan and UBS advised the target, according to Dealogic. Pending approval from Mexican authorities, companies controlled by Mitsui and Tokyo Gas will purchase a 76% participation in the assets through a capital injection to take place at the start of this year and dilute participation by Gas Natural. The buyers also have the right to execute a purchase option on the remaining 24% this year. The seller gets a total of $240m in cash through repayment of debt and shareholders’ contributions. The agreement for the divestment in Mexico includes generation plants Anahuac (Rio Bravo II), Lomas del Real (Rio Bravo III), Vallehermoso (Rio Bravo IV), Electricidad Aguila Altamira and Saltillo, with a total installed generation capacity of 2,233MW, and also the gas pipeline, Gasoducto del Río and the company Compania Mexicana de Gerencia y Operacion. The transaction marks the completion of Gas Natural’s divestment process announced to the market to reduce debt incurred when it acquired Union Fenosa. Gas Natural says it will maintain a presence in Mexico’s energy sector. It claims to be one of the main gas and electricity operators in that market, with an installed capacity of 1,570MW, and another 500MW under construction and expected to come online shortly.