China Three Gorges Said to Explore Revamp of Overseas Assets

(Bloomberg) -- China Three Gorges Corp. is considering a revamp of its multibillion-dollar overseas asset portfolio, according to people familiar with the matter.

The state-owned energy giant is working with advisers on setting up an entity to hold the international assets, said the people, who asked not to be identified as the discussions are private. Strategic investors could be brought into the new holding company, while the company might consider a listing of the unit or some of the assets at later stage, the people said.

Deliberations are at a preliminary stage and there hasn’t been any final decision on the structure or valuations of any potential deal, the people said. A representative for China Three Gorges didn’t immediately respond to requests for a comment.

China Three Gorges has been snapping up foreign assets in the past decade, particularly in Latin America, as the government encourages renewable-energy investment. The company has purchased about $14 billion of assets from Europe to Latin America in the past decade, according to data compiled by Bloomberg. More than half of them are in Latin America, the data shows.

The firm continued its South America buying spree with a $3.6 billion deal for Sempra Energy’s business in Peru in September.

The energy giant’s most eye-catching deal was its $10 billion takeover offer of EDP-Energias de Portugal SA in 2018, which was the year’s largest Chinese outbound investment.

However, the deal to buy Portugal’s biggest power utility was called off in April amid heightened political and regulatory scrutiny of Chinese investment. It has since weighed purchasing control of EDP’s Brazilian business, Bloomberg News reported in June.

©2019 Bloomberg L.P.

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