China, Oman acquire 40 % in Portuguese utility firm for $778 million

The Portuguese government is selling 40 per cent of its national power and gas grid operator Redes Energeticas Nationais (REN) to China's State Grid International and Oman Oil Co, for €592 million ($778 million).

The sale is part of the Portuguese government's efforts to raise money in order to meet the terms of the $102-billion bailout accord arrived with the European Union and the International Monetary Fund.

Portuguese secretary of state for treasury and finance, Maria Albuquerque said that State Grid will pay €387 million for its 25-per cent stake, while Oman Oil will pay €205 million for the remaining 15 per cent.

Post sale, the state, which holds 51-per cent of REN, will see its stake reduced to 11 per cent. The government plans to sell the 11 per cent in a public offering.

Beijing-based State Grid, China's largest electric power transmission and distribution company, offered €2.90 a share, a 40 per cent premium on REN's closing price on 1 February, while state-owned Oman Oil offered €2.56 a share, a premium of 23 per cent.

Albuquerque also said that State Grid will guarantee REN with a €1 billion loan from China Development Bank Corp in order to help meet its refinancing needs until 2014.