The Spanish energy firm, Naturgy, bifurcates its business enterprises into two listed firms. One of the two firms will keep the structured electricity and gas transportation and distribution infrastructures. The other will preserve the relaxed energy generation and marketing business enterprises.
Naturgy’s management team stated that no faction of the firm would be sold, nor will it have an effect on employment. The firm noted that it was merely a rearrangement. Naturgy indicated that the stockholding structures were to remain the same.
The operation, communicated in the early afternoon to the National Securities Market Commission (CNMV), still necessitates the support of the general meeting of stockholders. And it arrived a few months after the Australian Investment Fund IFM revealed an unwanted acquisition bid on the Spanish firm. It managed to possess just more than 10% of the capital, which eventually increased to more than 12%.
As indicated by the executive president of the previous Gas Natural Fenosa, Francisco Reynés, the separation possessed the unanimous approval of the complete board of directors. Additionally, the break begot the permission of the IFM representative, who had recently accomplished the firm’s highest governing body. Sources close to the investment vehicle confirmed to the newspaper that they viewed the operation in good light as the separation of activities itself was one of its priorities. Additionally, one of Naturgy’s executives were admitted into the energy board.
Naturgy will be segregated into two factions that will not be equal in market value and books. Francisco Reynés added that he could not estimate the particulars on each side as it would depend on the liability assigned to every firm. Therefore, the firm still had to perform a detailed analysis. Nevertheless, Reynés stated that his conviction was an exemplary operation for everybody and that it would also end up existing for the relevant pricing. In practice, he remarked they had worked in this manner for years. Almost all the staff worked in one of the two business enterprises, except for the corporate faction.
Despite the debt distribution, a chief point in an operation of this characteristic has not yet been exposed. Predictably, the regulated activities tolerate enhanced indebtedness alongside possessing a more secure and predictable income. Therefore, it is logical that it keeps an inhibited financial cost. Naturgy declared the operation would be fabricated so that the parting is neutral financially for both the firm and its stakeholders.
Naturgy has also declared the call for a general meeting of stockholders for the coming March 15th 2022. Therefore, segregation is not estimated to happen on that occasion. However, when the separation is submitted to the deliberation of the firm’s owners, sources from the energy firm explain that it will still take a few months for it to complete its implementation.
The derivative project of Naturgy businesses, declared shortly before the stock exchange closing (a rarity since this type of declaration is generally made with the market already closed), has been welcomed with gains, and beyond everything, a lot of unpredictability. As soon as it discoursed its strategies to the CNMV, the energy firm’s stocks, which were plummeting, shot up 5.6% in several minutes. They then misplaced some of the ground increased and closed the session at EUR 28.40 per stock, up 1.72% from Wednesday’s close. Inquisitively, the strategy to divide the firm in two was not communicated to the supervisor as relevant information, which impacted the price.
The project reflects an enhanced restructuring of the firm and a new-fangled step in its reformatory process, as indicated to the stock market regulator. Naturgy’s management noted that the split intends to respond to the essential changes that are taking place in the energy industry, and that is going to underpin its future. As a result, both divisions of Naturgy would be amongst the top twenty Ibex 35 firms by market capitalization.
Naturgy’s two national victors
The executive president of Naturgy indicated that the firm fabricated two national title-holders. He said that he suggested that the segregated firms were two large firms, and for Spain, it was better to possess two firms of this scale over merely one. Reynés indicated that the government had informed all necessary entities and bodies when asked if the government knew about the split. He stated that the proposal for business segregation had arrived from the management committee and not from the board of directors.
In 2021, the former Gas Natural Fenosa witnessed net profits of EUR 1,214 million (USD 1,384.72 million), associated with losses of EUR 347 million (USD 395.80 million) spun in the same year. With electricity rates at immense highs and energy demand slowly returning to pre-covid pandemic levels, gross operating profit (EBITDA) surged to EUR 3,983 million (USD 4,543.11 million), 7% more than 2020 levels. Total debt, for its part, slipped almost 6% to EUR 12,831 million (USD 14,635.36 million).
