Actis, Edra looking to acquire Egypt’s Siemens power plant for up to $2 bn

PE firm Actis and Malaysian power company Edra could spend up to USD 2 bn to acquire one of our Siemens-built power plants.

Actis, Edra eye Siemens power plant: Private equity outfit Actis and Malaysian power company Edra have renewed their interest in acquiring one of the three Siemens-built power plants in a transactionthat could be worth USD 2 bn, Bloomberg reported Thursday, citing anonymous sources familiar with the matter. The sale of the 4.8-GW Beni Suef plant, which has been earmarked for a transaction, would inject new momentum into the government’s privatization drive and bring in much-needed foreign currency.

What we know: Both companies plan to submit offers to acquire as much as 100% of the plant and operate it, according to Bloomberg’s sources. The USD 2 bn valuation includes outstanding debts, making it unlikely that the government would receive the full sum if it goes through with the sale. The Egyptian Electricity Holding Company took out a loan from an international banking consortium for 85% of the EUR 6 bn price tag for the three plants. It’s unknown how much of the loan the company has repaid since it began repayments in 2019. The financial obligations of the plant would be transferred to the new buyer, according to Bloomberg.

We’ve been here before: Actis and Edra were among the interested companies when the government first began courting international investors in 2019. Along with Blackstone, both were in talks with authorities over the prospective sale which never went anywhere.

No-one can buy the plant without the lenders’ permission: Under the terms of the financing, Egypt can only sell the assets if it pays off the loans in full or gets the lenders’ permission. German development bank KfW, Deutsche Bank, and HSBC are the primary financers of the project, lending Egypt EUR 4.1 bn.

Remember: Egypt wants to sell USD 2 bn of assets before the end of this month. The government has so far raised some USD 147 mn by selling off Pachin and a 10% stake in Telecom Egypt.

(Source: Enterprise News)