Naturgy will have to get permission from the next government for its spin-off plan

plan nature To divide the company into two parts, it must have prior permission from the following government. call repair Escudo Antibus – The standard adopted in the pandemic to protect Spanish companies from foreign investment – implemented two weeks ago by the Socialist executive administration is a new obstacle to Newly activated Project Geminiwith the energy company intends to separate their souls: the organized part, which includes the infrastructure for the transmission and distribution of gas and electricity; and Liberated Business, which includes energy generation and marketing activity. The government will have to explicitly authorize this split-up with Naturgy’s foreign shareholders, who make up the majority.

Financial sources explain that the new protection against foreign investment appears tailored to the specific case of the company headed by Francisco Reynis. They warn that the end result of the new regulation is that it complicates the already tangled balancing game between shareholders in Spain’s second largest energy company.

The Royal Decree allows the investor to reduce fees and potential administrative hurdles. The Minister of Industry explained that the response and decision periods have been reduced, which was one of the most important demands of companies and investors. Hector Gomezduring a show decree, which also includes a system of penalties for compliant companies that do not seek prior permission from the executive branch. It identifies the type of foreign companies and operations that need or not require investment authorization from management, which improves the predictability of the base. In addition, a series of exceptions have been made to the prior authorization system. Asked by this newspaper, a spokesperson for Naturgy declined to make any comment in this regard.

The new legislation, passed by Pedro Sánchez’s government on July 4, less than three weeks before Sunday’s general election, states that the liberalization regime may be suspended for activities in which it “might affect or there is a risk of compromising public safety, health or order,” according to the text. The regulation specifies that these activities include “the energy sector, to operate generation stations, gas-to-gas re-gasification stations, transmission and distribution networks, storage, and operation of facilities or supply systems for electricity, hydrocarbons, biofuels, and renewable gases.” Virtually all Naturgy activities fit this definition.

at another point of decree Activities that will not be subject to prior authorization from the government are detailed: “Acquiring companies or assets that do not carry out regulated activities, understood as such to operate the electricity and market system, transmission and distribution of electricity, supply of electricity in non-insular areas, technical management of the gas system, regasification of natural gas, its primary storage, transportation and distribution. Likewise, the activities defined by the applicable sectoral legislation will be considered regulated activities.” In other words, it is understood that organized activities, such as those run by Naturgy, require special permission from the Cabinet. You will have the last word.

A year and a half of turmoil

The past few times have been anything but quiet on noble earth Former natural gas venosa. The unrest began shortly before the Russian invasion of Ukraine, with the announcement of the separation of two independent companies: one for the regulated assets – classical music from his work – and the other for the freed companies – Rock and Roll Music-. Continuing as the war raged, the increase in the cost of energy was a blow to the income statement, but also a brake on Gemini. And it was further prolonged with the unsuccessful appointment of Ignacio Gutierrez-Urancia to second place in the group when everyone – both inside and outside the company – had already taken it for granted.

The Biscayan CEO, co-responsible for banking, capital markets and advisory services for Europe, the Middle East and Africa for the US investment giant Citi, wasn’t just very close to Reynés: he collaborated with Naturgy as an outside consultant on many strategic decisions and knew the company’s guts firsthand. Both his signing and his subsequent refusal, last Tuesday, came at the wrong time: A shareholder meeting renewed Raines at the end of March as chief executive, and logic suggests that this is the moment chosen to make the move. In those days, on the other hand, the need to create the CEO position, which has disappeared from Naturgy’s organizational structure since the arrival of the CEO at Balearic in 2018, was categorically rejected. Former natural gas venosa Thus, it is one of the very few Ibex 35 companies that do not distribute powers between two people, which is a fundamental principle of good corporate governance.

What we have witnessed in recent weeks is another chapter of an apparent clash in the capital of Spain’s second largest energy company. La Caixa, the largest shareholder of Naturgy (26.7%) since time immemorial, is the largest fortress of Rennes. This was made clear in the 10th, when he endorsed his support of the Balearic Islands as sole head of the company. The Catalan hasn’t meant much behind the scenes since the takeover bid in 2021 by the Australian fund IFM, which today is the fourth largest shareholder (14%). Unlike back then, this time oceanographers chose to remain in a top-secret background, without participating in the failed operation to map Gutiérrez-Orrantia.

The most bidders for the arrival of a CEO cohabiting with Reynés were the CVC and GIP funds, the energy company’s second and third largest shareholders (with 20.72% and 20.64%, respectively). GIP entered the capital of Naturgy in 2016 and CVC did so in 2018, and financial sources believe that it is looking for a way out to realize the profits accumulated over these years, as is customary among these financial instruments.

Both British and US funds are the biggest promoters of Geminis, a project in which they saw an opportunity to execute their exciting capital gains on Naturgy without a quick offering that would reduce the value of the company’s shares. Spanish energy company Today it trades at 50% more expensive than when I entered GIP and CVC. A calculation that does not take into account the large profits distributed by the energy company in that period. After a sharp post-pandemic rally, its shares They have remained practically stable, with no significant upward or downward movements.

Last week, the Governing Council dealt with the issue of the failed appointment of Gutierrez-Urancia in a matter of minutes and as the last point on the agenda: once the Basque executive’s “no” was known, there was little to discuss. However, aware of the increasingly apparent differences between its owners and after the failure, Naturgy’s leadership wanted to launch a triple signal last week to GIP and CVC: an increase in dividends, a decrease in investment and, above all, a revival of Gemini. This last point will have to wait. Furthermore.

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