May 2, 2016 / 6:42 PM / 2 years ago

State Grid says purchase of Abengoa's Brazil assets not imminent

RIO DE JANEIRO, May 2 (Reuters) - State Grid Corp’s plans to buy Abengoa SA’s power transmission lines in Brazil is likely to take longer than expected as the different nature of some assets is complicating talks, a senior executive at the Chinese utility said.

China’s State Grid, which the Brazilian government sees as the leading buyer of the Spanish company’s transmission assets in Brazil, is also eyeing assets in other segments of the domestic electricity industry, Vice President Ramon Haddad told Reuters late on Friday.

The Abengoa negotiation involves several new projects that Brazil’s government regards as key to guaranteeing future power supply. Abengoa stopped construction works for those and other projects in Brazil late last year, following a request to seek a pre-insolvency request in its native Spain.

“There are all types of assets - greenfields, brownfields, some with related financing deals, others with contracts already signed to provide services, so it is a protracted transaction,” Haddad said. He declined to give a timetable for any deal.

Brazil’s energy ministry would like to see Abengoa and bidders finalizing an agreement rapidly, in order to kick-start the projects as soon as possible. A top official said last week he expected a firm offer from State Grid by May.

The Spanish company was given until October to reach a deal with creditors and avoid bankruptcy. Abengoa was building more than 6,000 kilometers of power transmission lines in Brazil, where it already operates around 3,500 kilometers of lines.

State Grid is the only company that has said it is in talks to buy Abengoa’s Brazilian assets.

Haddad also said State Grid, which plans to invest up to 15 billion reais ($4.3 billion) in Brazil by the end of the decade, could take part in an auction to sell power distribution firm Celg-D and will wait to see terms of the deal to decide.

Celg is controlled by state-controlled power holding company Centrais Elétricas Brasileiras SA.

$1 = 3.4931 Brazilian reais Writing by Marcelo Teixeira; Editing by Guillermo Parra-Bernal and Andrew Hay

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