GDF Suez sells 20% share in Jirau power plant for the Japanese Mitsui

The franco-Belgian company GDF Suez sold 20% stake in Jirau hydroelectric power plant, in Madeira River (RO), to Japanese Mitsui, for $ 1.14 billion. The transaction was based on an equity value of $ 5.7 billion for 100% of the project (2.2 billion) in December 31, 2012.
The entry of the Japanese Mitsui in the Jirau project reduces the risk of Tractebel (energy generating controlled by GDF Suez) when it comes to buy the 40% remaining in the project, evaluated the Credit Suisse analyst, Vinicius Canheu in comment distributed to customers.
"After the deal with Mitsui, the total size of the operation to the Tractebel became much smaller. So, the perception of risk reduction can be consolidated, "he said.
During the second half of 2012, the GDF had increased their participation in Jirau, 50.1% to 60% through the acquisition of an additional interest of 9.9% of Camargo Correa. Even after the closing of the deal, GDF Suez will remain the largest shareholder in the project, with 40% of the participation, whereas Chesf and Eletrosul, subsidiaries of Eletrobras, keep a slice of 20% each, the same participation of Mitsui.
Canheu said that the purchase of GDF in Jirau has been seen by the market until then as the major risk to generating paper. Before the deal was announced, the market working with the hypothesis that Tractebel would buy the 60% stake which hitherto were held by French multinational.
Investors and analysts feared that the company pay an excessive value for shareholders and slice it reduces the level of distribution of dividends. According to the analyst, the fears now tend to decrease. "We believe that there will be a positive reading for Tractebel," he said.
Less risk. Unlike other Tractebel power does not participate directly from auctions of new energy when it comes to the dispute by the granting of new dams. Who assumes that role is GDF Suez, and this strategy aims to prevent the risk of the enterprises from infecting the results and performance of the shares of Tractebel.
When the risks of construction of power plants are almost mitigated, the GDF Suez sells its shareholding to the subsidiary in Brazil. This model always displeased the remaining shareholders of Tractebel on behalf of potential conflict of interest involving operations. The latest forecast of GDF Suez is the first hydroelectric turbine in operation until the end of June. Currently, Tractebel holds r $ 500 million reserved in order to purchase from participation in Jirau.
The Jirau hydroelectric plant has a capacity of 3.75 thousand MW, with assured energy of 2.185 thousand MW. The project was won in new energy auction held in 2008, and had the contract forecast to come into operation in January 2013. Originally, the intention was to start power generation project in mid-2012, but a string of strikes and construction delays in transmission lines did the schedule be extended.