Neoenergia signed an agreement on Tuesday (25) with GIC, a leading global institutional investor, for the sale of a 50% equity interest in eight transmission assets that are in operation. The projects – Jalapão, Santa Luzia, Dourados, Atibaia, Biguaçu, Sobral, Narandiba and Rio Formoso – total 1,865 kilometers of transmission lines. The purchase price is estimated at about R$ 1.2 billion, subject to usual price adjustments. A transmission holding company will be set up to incorporate the operating assets.
The GIC will also have the right to first offer in relation to the potential future sale of a 50% stake in the transmission assets under construction by Neoenergia – Itabapoana, Guanabara, Vale do Itajaí, Lagoa dos Patos, Morro do Chapéu, Estreito, Alto do Parnaíba and Paraíso – which cover 6,089 kilometers of lines. The same right will apply to Potiguar Sul, totaling 6,279 kilometers of lines.
Under the terms of the agreement, the valuation for 100% of the company's assets would be approximately R$ 2.4 billion. It is worth mentioning that Neoenergia will no longer consolidate the debt of the operating assets, considered within the scope of the operation.
After the closing of the operation, Neoenergia will continue to provide operation and maintenance services, as well as other corporate services to the operating assets.
In addition, Neoenergia and GIC signed a development contract for joint participation in the upcoming transmission auctions in Brazil, including the event scheduled for June 30.
"For Neoenergia, it is a great pride to partner with an internationally recognized partner such as GIC. This transaction confirms Neoenergia's operational excellence and recognizes the company's good capital allocation in recent years. It also reinforces our commitment to the strategy of recycling assets and optimizing results for our shareholders," said Eduardo Capelastegui, CEO of Neoenergia.
" GIC is pleased to invest in the growing Brazilian power transmission market, an essential part of the country's decarbonization and electrification efforts. We look forward to working alongside Neoenergia's strong management team and leveraging their deep local knowledge and capabilities to develop the platform's considerable long-term growth opportunities," said Ang Eng Seng, Director of Infrastructure Investments at GIC.
The transaction is still subject to customary conditions precedent, including prior approval from government authorities and certain third parties, and is expected to close in the second half of this year.
The eight assets in operation have Permitted Annual Remuneration (RAP) of approximately R$ 430 million, and an average concession term of 25 years.
In addition to the assets in operation, GIC will have certain rights in relation to the potential sale of eight other assets under construction and Potiguar Sul. The total RAP of these assets is equivalent to approximately R$ 1.3 billion.