Edition 1509
12 January 2019
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Sale of EDP may be 'positive' - Moody's

by TPN/Lusa, in News · 17-05-2018 08:42:00 · 2 Comments

The takeover of Portuguese power company EDP by China Three Gorges (CTG) tmay be "positive" for the company, rating's agency Moody's said on Wednesday.

Sale of EDP may be 'positive' - Moody's


According to Moody's CTG's offer may be positive for EDP's credit profile, as there may be "operational and financial synergies" within a large group of renewable and diversified energy, Moody's said in a statement.


The agency also highlighted the support that could come from the largest shareholder that has an 'A1' rating, while EDP has a rating of 'Baa3'.


However, Moody's underscored the uncertainty around the success of the takeover bid, as it was launched with, "a modest market premium" and also depends on a number of factors, such as EDP's corporate strategy and capital structure, after the transaction, the leverage profile of the group and the size of CTG's future stake.


"Given CTG's credit quality, EDP's shareholder history, and the forward-looking statements, we currently do not expect CTG's stake to be negative for EDP," Moody's said.


On the impact of the transaction o CTG, the rating agency said the rating of the Chinese company will not be "immediately affected."

Standard & Poors (S&P) also said CTG's proposed purchase of EDP "will have no impact on the Chinese group's rating," because there is a high probability of "extraordinary support from the Chinese government if necessary."


On Friday CTG announced its plan to launch a voluntary takeover bid for EDP, offering €3.26 per share, which is a 4.82% premium over market price and values the company at around €11.9 billion.


CTG, which already owns 23.27% of EDP, intends to keep the company based in Portugal and listed on the Lisbon stock exchange.

If the takeover bid for EDP is successful, CTG will move forward with a mandatory tender offer for 100% of EDP Renováveis' share capital, at €7.33 per share.


The Chinese group says in its preliminary announcement that it will only launch the takeover bid for EDP if the Portuguese government does not oppose it.


The Portuguese prime minister, António Costa, has already said that he has no objections to the Chinese group launching a takeover bid for EDP.


EDP has said that the price offered by China Three Gorges (Europe) to acquire it is low and "does not adequately reflect the value" of the company.


Maybe we should all start leaving Portugal as the government and the EU could not care less about its people .
People have no confidence in Chinese companies at providing resonable services , and who will control the costs of electricity , and who will do the investment needed to provide ecological electricity generation .
by PG from Lisbon on 17-05-2018 06:32:00
All essentil services should be state run , and selling it to a foreign countries companies is dangerous and a poses security issues . Questions have to be asked concerning Portuguese and EU politicians for allowing essential services to be sold to a foreign unfriendly power .
What are the ideas behind this , and who will be responsible if China makes use of its power over essential services in Europe .
by PG from Lisbon on 17-05-2018 06:28:00

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Edition 1509
12 January 2019
Edition: 1509

Read this week's issue online exactly as it appears in print.



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