State-owned Shanghai Electric mulls bid for Spain’s ACS Renewable Assets

Power grids. Photo: Fré Sonneveld/unsplash

Shanghai Electric Power Co. is considering a bid for Spanish renewable energy assets owned by builder ACS’s Zero-E unit, according to people familiar with the matter.

The state-controlled Chinese utility is working with a financial adviser on an offer for the assets, which could be valued at about 500 million euros ($551 million), the people said, asking not to be identified because the deliberations are private. Other energy companies and investment funds have also shown an interest in acquiring the Spanish portfolio, the people said.

Madrid-based ACS is seeking to reach a deal with a buyer within the next few months, they said. Zero-E’s Spanish operations include about 1 gigawatt of total capacity, mainly from solar photovoltaic power generation, according to a company presentation.

ACS, as ACS Actividades de Construccion y Servicios SA is known, has been weighing a stake sale or an initial public offering for its Zero-E unit at a valuation of about 2 billion euros, Bloomberg News has reported.

While ACS’s preferred option has been to sell a controlling stake in the business, bidders have found it hard to match its valuation expectations given the wide range of assets and geographies, the people said. That has led Chairman Florentino Perez, the Spanish billionaire who also heads the Real Madrid football club, to consider piecemeal sales of Zero-E assets, the people said.

No final decision has been made, and the companies could still decide against pursuing a transaction, the people said. Shanghai Electric Power didn’t immediately respond to an email and phone calls seeking comment. A representative for ACS declined to comment.

Shares of Shanghai Electric Power rose 0.3% as of 9:55 a.m. local time Thursday, in line with the 0.2% gain in the benchmark Shanghai Composite Index.

The Chinese company has made an unsuccessful attempt to buy renewable energy assets in Spain in the past. In 2017, it lost out to Alberta Investment Management Corp. in a bidding contest for Eolia Renovables de Inversiones SCR SA from U.S. buyout firm Oaktree Capital Group LLC.

Zero-E owns renewable-energy projects and infrastructure for power and water supply in areas from Spain to Latin America and Africa. Beyond photovoltaic, solar thermal and onshore wind, its portfolio also includes hydro and offshore wind assets, totaling about 1,481 megawatts of capacity operating and under construction.

In 2016, ACS agreed to sell its environmental services unit Urbaser to Firion Investments, controlled by a Chinese group, for as much as 1.4 billion euros.

Bloomberg

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.