Portugal’s Galp Energia has asked French EDF’s investment arm, and other infrastructure funds to submit tentative bids for a 49% stake in its gas distribution business, four sources familiar with the matter told Reuters.
Galp is working with Bank of America to shortlist bidders. The Portuguese firm, whose domestic gas networks transport 1.5bcm of gas a year along 12,159 km of pipeline, wants to raise fresh funds and ensure its free cash flow breaks even in 2018. A recent note by Haitong Securities estimated the enterprise value of Galp’s gas distribution business at $1.55b
EDF Invest, the investment unit of French utility giant EDF, is among infrastructure investors who already submitted non-binding offers for the stake, the sources said.
In addition, a handful of investment firms including First State Investments and Goldman Sachs Infrastructure Partners had also expressed interest in the asset, the sources said, cautioning no deal was certain, the Portuguese newspaper Economico wrote.