Enel in talks to sell its Romania business to PPC from Greece

Enel signed an exclusivity agreement on the potential sale of its entire operations in Romania to Public Power Corp. (PPC). The negotiations are scheduled to last until the end of January, after which the Greek company can submit a binding offer.

Pressed by debt and the need to strengthen its green energy portfolio, Italy-based Enel acknowledged last month that it solved a multiyear dilemma about the future of its subsidiaries. Its business in the country, and in some other parts of the world, is for sale to enable massive investments in the core markets: Italy, Spain, the United States, Brazil, Chile and Colombia. The plan for the next three years is valued at EUR 37 billion.

After repeated news reports that Enel is in talks with PPC in relation to the plan to exit Romania, the two companies announced that they reached an exclusivity agreement. They have set the end of January as the deadline for the Greek utility to complete due diligence, after which its board of directors would determine whether to submit a binding offer.

Italian energy giant may still expand in Greece

Interestingly, as part of its strategic repositioning, the Italian energy giant has indicated it may pursue a so-called stewardship model in Greece, actually implying expansion, through partnerships with other firms. But PPC, which invests in green energy in Greece through its PPC Renewables branch, earlier opted to seek acquisitions in Romania and Bulgaria and other opportunities in the Balkans.

There is another potentially important factor: Chief Executive Officer Georgios Stassis was the head of Enel Romania from 2016 to 2019. He worked in the company since 2007.

The government in Athens is the dominant shareholder in PPC, also known for its Greek acronym DEI, though last year’s capital increase left it with a minority stake.

Enel Romania is valued at up to EUR 1.9 billion

According to unconfirmed reports, Enel’s businesses in Romania are estimated at anywhere between EUR 1.3 billion and EUR 1.9 billion. It is active in the development and construction of renewables and operates three electricity distribution and two supplier firms. The installed green electricity capacity is 543 MW, of which wind farms account for 498 MW. Another 170 MW is under construction and there are several gigawatts more in the pipeline.

Brookfield Asset Management from Canada and Amber Infrastructure from the United Kingdom were said to have shown interested in the transaction.