Brookfield Infrastructure to acquire GNF’S Colombian unit

20 November 2017 - 12:00 am UTC

Brookfield Infrastructure Partners (BIP) has agreed to acquire 59.1% of Colombian gas distribution company Gas Natural S.A. ESP for EUR 482m (USD 559.51m).

Based on the disclosed enterprise value of EUR 1.01bn for Gas Natural S.A. ESP, the purchase price amounts to about 7.3x its last-12-months EBITDA or 13.8x its last-12-months net profit.

Brookfield Infrastructure Partners made the acquisition from Brookfield Infrastructure Fund III (BIF III)Inframation understands.

Brookfield Infrastructure Partners has made large acquisitions in the Colombian energy sector before. The firm acquired 100% of number three electricity generator Isagen for USD 3.8bn in 2016. Gas Natural’s Spanish parent Gas Natural Fenosa (GNF) announced the sale of its Colombia unit to Brookfield on 18 November. 

GNF has been selling stakes in some of its global assets. Notably, a consortium comprising Allianz Capital Partners (Infrastructure) and Canada Pension Plan Investment Board (CPPIB) on 3 August agreed to acquire a 20% stake in GNF’s Spanish gas distribution business. 

A consortium led by French and Italian institutional investors AXA Infrastructure Fund II, F2i Fund I and F2i Fund II on 17 October agreed to acquire 100% of GNF’s Italian portfolio. The assets included Gas Natural Italia, Gas Natural Vendita Italia, Gas Natural Distribuzione Italia and Gas Natural Rigassificazione Italia.

GNF sold 184,619 GWh of natural gas to 5.3 million Spanish customers in 2016. It is present in nine regions and owns some 52,000km of distribution networks. GNF’s domestic gas distribution business recorded earnings of EUR 439m in 1H17. The results according to the firm represent a 3.5% YoY increase.

Gas Natural S.A. ESP has since November 2016 been locked in a dispute with Colombia’s federal government over its Electrificadora del Caribe (Electricaribe) electricity distribution network. 

In March, the residential public services regulator announced it would “liquidate” Electricaribe following its November 2016 seizure due to faulty services and failing finances. Gas Natural S.A. ESP on 22 March argued for Electricaribe’s reinstatement before the United Nations Commission on International Trade Law (UNCITRAL) on the basis that the government did not do enough to address EUR 1.3bn in debts stemming from fraud and nonpayment by some users.