China Three Gorges to pay €219 million to retain power in EDP

 In Energy, News

EDP is to ask shareholders to beef up their investments in the Portuguese energy company through a capital call of around €1Bn.

Just over one year after China Three Gorges lost a PAO (Public Acquisition Offer) for an outright controlling share in the electricity producer, the Chinese energy company will have to cough up €220 million in order not to see its position watered down.
EDP, which is currently being run by Miguel Stilwell d’Andrade while António Mexia and João Manso Neto face court proceedings over market interference, announced on Thursday that it will advance with a capital call — the first since 2004 – to raise €1.020Bn needed to finance the purchase of the Viesgo power station in Spain.
The public capital call for the subscription of 309,143,297 new shares (around 8.45% of the total capital) is reserved for shareholders and other investors who have acquired the rights to subscribe.
The price for each new share has been pegged at €3.30, which represents a discount of 23% on the price per share listed at the last close of trading session before the announcement was made.
If China Three Gorges wants to maintain its 21.47% capital interest in the power producers it will have to buy 66.4 million shares, which means it will have to stump up €219 million. However, it is still not at all certain that it will do so given that its recent strategy has been the opposite.
Since losing out on the PAO when they tried to takeover EDP, the Chinese investors have reduced their current position from 28.25% to 21.47%.
Nevertheless, the interim caretaker Stilwell d’Andrade who will run the company while António Mexia is suspended, has signalled that there is no opposition to China Three Gorges increasing its capital share.