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UPDATE 2-Enel loses appetite for further acquisitions in Brazil

UPDATE 2-Enel loses appetite for further acquisitions in Brazil


(Recasts first sentence with Brazil acquisition halt, adds management comments)

MILAN: Italian utility Enel SpA has called a halt to further acquisitions in Brazil for the time being as it gears up to complete asset sales of up to 1.5 billion euros ($1.8 billion) in the second half of the year.

“I don’t see appetite for further acquisitions in Brazil at this stage,” Enel CEO Francesco Starace told analysts on a conference call on Tuesday after the company released first-half results.

In June, Europe’s biggest utility agreed to spend almost $1.5 billion to buy a majority stake in Brazilian power company Eletropaulo and also said it could spend more than $2.3 billion to buy a Latin American fiber company.

Last year it bought Brazilian power distributor CELG for about $640 million.

Earlier this month Starace told a Brazilian newspaper Enel was eyeing more electricity distributors in Brazil.

Enel, which controls Spanish utility Endesa SA, is one of the biggest energy players in South America and is reordering its portfolio and restructuring business there.

The state-controlled utility, one of the world’s biggest green energy companies, is focusing on grids, renewable energy and retail business to drive growth, especially in emerging markets.

It is also rolling out a fast fiber broadband network across Italy using its power infrastructure to house cable, a project it plans to duplicate in other regions such as Latin America.

Asked about disposals in the second half of the year, Enel CFO Alberto De Paoli said the group expected to wrap up the sale of renewable energy assets in Mexico and Brazil as well as coal and biomass operations.

“Overall we could raise between 1.2 and 1.5 billion euros,” he said.

Earlier this week a source said Enel was ready to discuss the sale of its stake in solar joint venture EF Solare to partner F2i.

Asked about the issue, Starace said it was “something that could happen”.

Earlier on Tuesday, Enel said net debt at the end of June rose 11.2 percent from December to 41.6 billion euros mainly due to acquisitions, dividend payments and investments.

The utility stuck to its full-year targets after core earnings in the first six months rose 2.6 percent, boosted by higher margins at its green energy business.

Enel is targeting ordinary core earnings for the year of around 16.2 billion euros. ($1 = 0.8547 euro)

Source: in.reuters
Anand Gupta Editor - EQ Int'l Media Network


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