July 26, 2019 / 3:50 PM / 4 months ago

Portugal's EDP expects bids for hydro assets next week- CEO

LISBON, July 26 (Reuters) - Portugal’s Energia de Portugal (EDP) is expecting non-binding bids for its Iberian hydroelectric assets to be submitted next week, chief executive Antonio Mexia said on Friday.

The group announced plans in March to sell 2 billion euros’ ($2.3 billion) worth of hydroelectric and thermal assets in Portugal and Spain.

Speaking on a conference call, Mexia said there was strong market interest in the hydroelectric assets and he had shared information with potential bidders.

“We have shared this (information) with key people that are really serious about this and we expect non bindings by the end of next week,” he said without giving details

Mexia also said all options were still on the table for EDP’s Brazilian subsidy after a 9 billion euro takeover bid by Chinese power giant China Three Gorges (CTG) was rejected by EDP shareholders in April.

People familiar with the matter had previously told Reuters that EDP could propose a joint venture with CTG, its largest shareholder with 23% of capital, allowing it to expand its foothold in Brazil and Latin America if the takeover bid failed.

CTG has an installed capacity of over 8 GW in Brazil, way above EDP’s capacity of around 3 GW. A merger between EDP Brasil and CTG Brasil could lead to a strong dilution of EDP’s 51% stake in its Brazilian subsidiary.

Asked on Friday about the possibility of EDP becoming a minority stakeholder in its Brazilian operation, Mexia said any option for the unit must align with EDP’s “equity story”, create value for shareholders and respect the interests of EDP Brazil’s minority shareholders.

“The key issue is to keep your principles and the lines we won’t cross,” Mexia said, adding that EDP would not take any step that did not reflect the full value of the subsidiary.

“We are ready to do whatever,” he said. “But we will not be in a wishy-washy situation.”

On Thursday, EDP posted a 7% increase in first-half net profit, backed by a strong performance in renewables, but penalised by regulatory and fiscal pressure in Portugal. (Reporting by Sergio Goncalves Writing by Catarina Demony Editing by Axel Bugge and Kirsten Donovan)

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