Enel To Sell Endesa Ireland To SSE For EUR 270 Mln

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6/15/2012 9:43 AM ET

Italy-based utility Enel SpA (EN: Quote,ENLAY.PK) Friday said its Spanish subsidiary Endesa SA has agreed to sell the entire share capital of Irish company Endesa Ireland Ltd., to Scottish and Southern Energy Plc or SSE (SSE.L) for 270 million euros or $340 million. The transaction is expected to have a positive impact on Enel's consolidated net debt, estimated at about 382 million euros.

Irish firm Endesa Ireland is 0.02 percent owned by Endesa and 99.98 percent by Endesa Generacion SA. The consideration of 270 million euros to be paid by SSE is subject to an adjustment mechanism at closing and including the value of CO2 emission rights and the company's fuel reserves. Endesa Ireland's enterprise value estimated at closing will be about 382 million euros.

The closing of the deal is expected to take place in the third quarter of 2012.

Endesa Ireland is the owner of power generation plants in Ireland with a total installed capacity of 1,068 MW or about 12 percent of the Irish market's installed capacity. In addition, Endesa Ireland is building a combined-cycle plant at the Great Island site with an installed capacity of 461 MW, which is expected to enter service in early 2014, Enel noted.

Separately, SSE announced that through its wholly-owned subsidiary SSE Generation Ltd, it has entered into an agreement with Endessa Generacion SA to acquire the shares on Endessa Ireland for a total cash consideration of 320 million euros plus an estimated 43 million euros of working capital. The company added that about 110 employees will be transferred to SSE from Endessa Ireland.

In 2011, Endesa Ireland posted revenues of around 90 million euros and a gross operating margin (EBITDA) on ordinary operations of about 38 million euros.

Earlier last month, Enel had reported a decline in profit for the first quarter, hurt mainly lower margins. First-quarter revenue grew 8.5 percent to 21.19 billion euros, due mainly to higher revenues from the sale of electricity on wholesale markets.

In Milan, Enel shares are currently trading at 2.47 euros, up 2.58 percent, on a volume of 80.07 million shares, against a three-month average volume of 57.84 million shares.

SSE.L trades at 1,369 pence, down 21 pence or 1.51 percent, on a volume of 2.4 million shares on the LSE.

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by RTT Staff Writer

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