New Fortress Energy (NFE) and its joint venture partner, Ebrasil Energia, have signed a share purchase agreement (SPA) with Brazilian power company Eneva.
As a result, Eneva will acquire 100% of the equity interests of the Porto de Sergipe power plant for R$6.1 bill in cash.
However, NFE will continue to operate and provide gas for the FSRU ‘Golar Nanook’, which feeds the plant, under a long term charter agreement.
Located in Barra dos Coqueiros in the country’s Northeast region, the 1,593 MW power plant was said to play a critical role in Brazil’s energy security.
As part of the transaction, Eneva has agreed to acquire, directly and indirectly, 100% of the shares of Centrais Elétricas de Sergipe Participações (CELSEPAR), which owns 100% of the equity interests of the power plant, and Centrais Elétricas Barra dos Coqueiros (CEBARRA), which owns 1.7 GW of expansion rights adjacent to the plant, for a total implied enterprise value of around R$10.2 bill.
Under the terms of the transaction, Eneva will take on the current debt of Centrais Elétricas de Sergipe (CELSE), the 100% owned subsidiary of CELSEPAR.
“We look forward to maintaining a long-term relationship with Eneva and the CELSE power plant,” explained Wes Edens, NFE Chairman and CEO. “Eneva is one of Brazil’s leading power companies and a highly capable long-term owner and operator of this critical power asset for northeast Brazil. NFE will continue to operate the ‘Golar Nanook’, an FSRU that remains chartered to CELSE for the next 20 years.”
“CELSE will play a critical role for Eneva’s strategy going forward. With multiple options embedded and a significant Thermal Power Plant pipeline to be developed it will allow Eneva to focus on what it does best – developing new business opportunities in Brazil having the access to gas as a cornerstone,” said Pedro Zinner, CEO of Eneva. “This can be the beginning of a very fruitful and long-lasting relationship between two companies which have complementary roles in the gas value chain.”
Subject to satisfying certain covenants and closing conditions, the transaction is expected to close in the second half of 2022.
Accounting for NFE’s 50% ownership of CELSEPAR, the sale is projected to generate about $550 mill for NFE, following the debt payment and other liabilities and net of transaction expenses.
