RWE Sells Czech TSO Unit NET4GAS
RWE AG has agreed to sell its Czech natural gas pipeline division in a deal worth about €1.2 billion ($1.5 billion).
German utility signed an agreement for the sale of 100% of its shares in NET4GAS, s.r.o., the independent Gas Transmission Operator in the Czech Republic, to a consortium of Allianz Capital Partners, the investment unit of Europe’s largest insurer and Canadian based Borealis Infrastructure.
Under the agreement, the buyers will also assume approximately €400 million in debt, bringing the enterprise value of the transaction to €1.6 billion. This represents a normalised valuation multiple (Enterprise Value/EBITDA) of c. 9x. The closing of the transaction is expected to occur in the second half of 2013
Hampered by the German government decision to exit nuclear power by 2022, the sale of NET4GAS is part of RWE’s disposal plans aimed at raising as much as 7 billion Euros by the end of 2013.
NET4GAS, operates a gas transmission network that stretches more than 3,600 kilometers (2237 miles) across the Czech Republic. In addition to being responsible for the national transmission of natural gas, it forms part of the international gas transit network moving Russian natural gas into central and Western Europe via the Ukraine.
A November 2012 bidding deadline was reportedly pushing backed as a result of a recent court ruling in which its Czech unit RWE Transgas, received a favorable ruling over Gazprom over "take-or-pay" agreements.
In October, the Austrian Federal Economic Chamber's International Arbitral Center in Vienna held that RWE Transgas is entitled to reduce its uptake of gas under existing take-or-pay commitments within the confines of long-term gas supply contracts with Gazprom Export, which are tied to oil prices.
Gazprom's existing gas supply contract with RWE Transgas expires in 2035. Under the contract RWE Transgas gets 9 billion cubic meters (bcm) of gas with the minimum annual contracted amount (take-or-pay) at 90%. Gazprom plans to appeal the ruling.
Interest parties for the NET4GAS assets reportedly includes Czech utility Energeticky a Prumyslovy Holding AS, Macquarie Group Ltd, Belgium’s Fluxys, private equity company KKCG Group, and Poland’s Gaz-System SA.