The operation will allow covering more than 800,000 km2./ Photo: Neoenergia
The Diplomat. 09/06/2017
The Brazilian energy company Neoenergia, 39% of which is owned by Iberdrola, has added assets of Elektro, the Brazilian subsidiary of the Spanish group, to set up the biggest electric company in Brazil and Latin America as a whole regarding the number of clients.
The transaction, announced yesterday, will be carried out under the formula known as incorporação, through which Neoenergia will implement a capital extension that will be completely endorsed by Iberdrola. The increase of the Spanish company’s share in that society will have as compensation the assets of Elektro, Iberdrola’s Brazilian subsidiary.
According to Iberdrola, this creates the biggest electric company in Brazil and the first one in Latin America regarding the number of clients, with 13.4 million. Besides, the company will provide 43 million people with service only in Latin America, a number clearly higher to the 18 million users Spain provides with services.
Furthermore, the company will have an area of 836,000 square kilometres (190,000 in Spain) and its distribution network will extend over 585,000 kilometres (268,000 in our country). The company will also be present in the business of wind and hydraulic power.
The company will provide service to 43 million people in the region, more than double than in Spain
The aggregate income figure of Neoenergia and Elektro for 2016 is of around 7,935 million euros, with an Ebitda (earnings, before interest expenses, taxes, depreciation and amortization) of around 934 million euros.
“The operation responds to the objectives established by our Strategic Prospects 2016-2020: betting on regulated and stable businesses, as well as consolidating and controlling the management of our activity in Brazil”, declared Iberdrola’s President, Ignacio Galán.
Thanks to this agreement (in which two other partners of Neoenergia, Caixa de Previdência dos Funcionários do Banco de Brasil and BB Banco de Investimentos del Banco de Brasil participate), “we are creating the biggest electrical company in Brazil and Latin America, which strengthens our commitment to contribute to the Brazilian energy development”, he pointed out.