Argentina’s Transener Stake Draws Chinese Interest

Argentina’s Transener Stake Draws Chinese Interest

02/03/2018 - 16:37 - China Southern Power is said to mull bid for part of Transener. Government is seeking to divest in push for foreign investment.
Pablo Rosendo Gonzalez and Vinicy Chan

State-owned China Southern Power Grid Co. is considering a bid for a stake in Argentina’s largest power-transmission operator that could fetch about $400 million, according to people with knowledge of the matter.

State Grid Corp. of China has also been invited to make an offer for the Argentine government’s indirect holding of about 26 percent of Cia de Transporte de Energia Electrica en Alta Tension Transener SA, said the people, who asked not to be identified because the information is private. The government, which announced its intention to sell in January, is also asking local suitors to bid, one of the people said.

Shares of Transener, as the company is known, jumped as much as 9.2 percent on Friday and was the biggest gainer in Argentina’s Merval index.

Argentina is seeking to divest assets amid a push to attract foreign investment, jolt the economy and manage a budget deficit that last year was equal to 4.1 percent of gross domestic product. Government attempts to reduce the deficit by raising energy tariffs have helped drive a rally in Transener’s shares, which have more than doubled in the last 12 months, giving it a value of about $1.1 billion.

State-run Enarsa SA and Pampa Energia SA each own half of a company that has a 52.7 percent stake in Transener. Pampa, which has a first right of refusal, is unlikely to seek to change the size of its holding in the Buenos Aires-based network operator, an official at the company said.

Representatives for China Southern Power and State Grid didn’t immediately respond to requests for comment. Representatives for the Argentine government and Transener’s other investors declined to comment. A Transener official declined to comment.

China Southern Power agreed last year to buy a 28 percent stake in Chilean utility Transelec SA for $1.3 billion. The deal for the Santiago-based company had attracted suitors including State Grid, people familiar with the matter said at the time.

Transener directly operates 12,583 km (7,819 miles) of power lines, and has a 85 percent share of the market. The company’s full name is Cia de Transporte de Energia Electrica en Alta Tension Transener SA.

— With assistance by Aibing Guo, and Eduardo Thomson es un sitio web oficial del Gobierno Argentino