Purchase of Singapore renewables operator Sunseap will not affect EDP’s rating
EDP announced on November 3 the acquisition of 87.4% of Sunseap, "the largest distributed solar power operator and the fourth-largest solar power operator in Southeast Asia", for €600 million.
Fitch announced on Wednesday that the acquisition of 87.4% of Singapore’s Sunseap will have no impact on EDP’s rating, as it is “consistent with the investments” projected in the business plan until 2025.
“EDP’s acquisition of 87.4% of Singapore renewable energy operator Sunseap for €600 million (book value) will have no impact on the Portuguese company’s rating as it is consistent with the investments projected by Fitch Ratings and in EDP’s business plan until 2025,” Fitch said in a statement.
Fitch stressed that even if the acquisition “represents an anticipation of investments in renewables in new markets projected up to 2022”, it expects that “the anticipation of Capex [investment] will be financially accommodated, probably with some postponement of investments in other organic renewable projects, with minimal impact on the leverage limits until 2022”.
EDP announced on November 3 the acquisition of 87.4% of Sunseap, “the largest distributed solar power operator and the fourth-largest solar power operator in Southeast Asia”, for €600 million, in a transaction that “represents a valuation of the Singaporean company at €870 million.
On the same day, EDP’s CEO, Miguel Stilwell d’Andrade, told Lusa that EDP plans to invest €1.5 billion in the Sunseap group by 2025.
“Strategically, it is a transaction that obviously has a great fit with EDP’s portfolio,” he said.
“We truly become a global company, with a presence in the four major regions: United States, Europe, Latin America and now also Asia”, something that allows us “to take advantage of the dimension of the Asian market and all the growth that is also expected over the coming years”.
The company also pointed out, in the statement sent at the time, that “between the signing and closing of the deal, EDPR will be able to increase its stake to 91.4%”.
The rest of the capital will remain in the hands of Sunseap’s founders and another shareholder, of Japanese origin, he indicated.
EDP will keep the group’s management team, he said, noting that it was “one of the company’s attractions.
“Now the key word will be to consolidate our presence,” he said, adding that EDP has entered “many markets in the last 12 or 18 months”. The focus, “rather than broadening the number of countries, will now be to consolidate,” he noted.
