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GDF SUEZ and CIC have signed a MOU

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The press release states, “as a first milestone of this cooperation, advanced exclusive talks on a €2.3 billion minority investment by CIC in the Exploration & Production division of GDF SUEZ to accelerate the development and on the €0.6 billion acquisition by CIC of a 10% stake in the LNG Atlantic liquefaction plant in Trinidad and Tobago.

GDF SUEZ and China Investment Corporation (“CIC”) have signed a Memorandum of Understanding (“MoU”) for cooperation across multiple businesses and regions, in particular in Asia Pacific. GDF SUEZ and CIC will cooperate on a non-exclusive basis to help accelerate their respective strategies by exploring areas of cooperation and co-investment opportunities. The MoU will be deployed across GDF SUEZ Group’s businesses (gas, power, water and waste, and energy efficiency services) and sets up the framework for cooperation in three areas:

(i) joint investment opportunities in existing and new energy-related projects in Asia Pacific;

(ii) financing cooperation in new projects in Asia Pacific;

and (iii) commercial sponsorship and support to GDF SUEZ in Asia Pacific region, including China, by CIC’s affiliates.

The MoU will be administered through a Steering Committee chaired by the two groups’ respective CEOs.

As the first milestone of this cooperation, CIC is in advanced exclusive talks with GDF SUEZ regarding a €2.3 billion minority investment in the Exploration & Production division of GDF SUEZ (“GDF SUEZ E&P”) (excluding the 22.5% equity stake in E.F. Oil and Gas Limited (“EFOG”)). CIC will own 30% of GDF SUEZ E&P, following a capital increase and a financial restructuring of GDF SUEZ E&P reducing its net financial debt to €0.7 billion.

The minority investment of CIC will reinforce GDF SUEZ E&P’s capital structure and will contribute to accelerate the development of this important activity for GDF SUEZ by providing the appropriate financial flexibility. Initiated in the 1990s via acquisitions followed by strong organic development, GDF SUEZ E&P has 2P reserves of 815 mmboe at the end of 2010, an annual production of 51 mmboe in 2010 and a significant portfolio of contingent resources and exploration prospects. With more than 1,500 employees in 13 countries, it generated €2.2 billion of revenues and €1.4 billion of EBITDA in 2010. The transaction values GDF SUEZ E&P (excluding EFOG) at c. €8.1 billion in enterprise value.

As part of the transaction, CIC would also acquire from GDF SUEZ a 10% stake in the train 1 of the Atlantic LNG liquefaction plant located in Trinidad and Tobago as well as production payments associated with trains 2, 3 and 4 for an amount of €0.6 billion.

The potential acquisition by CIC of a 30% stake in GDF SUEZ E&P and of its 10% stake in the LNG Atlantic liquefaction plant is part of GDF SUEZ’s portfolio optimization program of €10 billion, announced at the 2010 annual results presentation and would result in net cash proceeds of €2.9 billion. The transaction will be subject to condition precedents being satisfied and will be presented for consultation to GDF SUEZ’s employee representative bodies. The transaction could be finalized by the end of 2011. The GDF SUEZ Board of Directors views the cooperation with CIC and the transaction as having a strong strategic interest for GDF SUEZ.”

Read more: GDF SUEZ Press Release

GIC Buys Large Stake in Nordic Aviation Capital

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Singapore’s GIC Private Limited, a yield-hungry sovereign investor, invested in Denmark-based Nordic Aviation Capital A/S, becoming a significant minority shareholder. Other shareholders in Nordic Aviation Capital include EQT VI Limited fund, KIRKBI Invest (wealth origins tied to Legos), and Martin Møller, the founder of Nordic Aviation Capital. EQT VI will remain the largest shareholder of Nordic Aviation Capital. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Trump Wants Pharma Companies to Disclose Drug Prices in Advertisements

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U.S. President Trump is progressing on plans to mandate pharmaceutical companies to reveal their prices in drug advertisements. “The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay,” Health and Human Services Secretary Alex Azar said in a statement. “So while the pharmaceutical industry’s action today is a small step in the right direction, we will go further.”

The U.S. Health and Human Services Department would require pharmaceutical companies to include drugs’ sticker prices in their video advertisements. This would be similar to how drug companies disclose the laundry list of side effects.

Increasingly, sovereign funds like Temasek Holdings have backed mid-stage pharmaceutical companies and other therapies, while market investors like Norway’s GPFG have large holdings in listed pharmaceutical companies.

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Kazatomprom Treads Closer to IPO

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Kazatomprom is the world’s biggest uranium producer, accounting for around 20% of production market share. The company is moving forward on floating up to a 25% company stake for its planned initial public offering in London and Astana, Kazakhstan. Kazatomprom’s IPO plans are subject to market conditions. The global market price of uranium generated significant price gains year-to-date through almost three quarters. So far, during 2018, the uranium spot price has moved from US$ 20 per pound to US$ 27 per pound.

Kazatomprom’s sole shareholder is Samruk-Kazyna. Samruk-Kazyna would retain at least a 75% stake in the company.

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Credit Suisse and JPMorgan are joint global coordinators and joint bookrunners for the share offering. China International Capital Corporation, Halyk Finance, and Mizuho International plc were joint bookrunners.

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