Naturgy Said to Shelve $2.6 Billion Sale of Australia Assets

(Bloomberg) -- Naturgy Energy Group SA has shelved plans to sell the Australian assets of its renewable energy unit Global Power Generation on valuation concerns, people familiar with the matter said.

The Spanish energy group has put the potential sale on hold after early indications of interest from prospective suitors did not meet valuation expectations, the people said, asking not to be identified because the matter is private. Madrid-based Naturgy was seeking to raise about A$4 billion ($2.6 billion) from the disposal, according to the people.

Infrastructure-focused investment funds and renewable energy companies were among bidders, one of the people said. A sale process could be revived at a later stage, the people said. Given current valuations, Naturgy sees more upside for the unit before divesting, one of the people said.

A representative for Naturgy declined to comment.

The company’s shares have dropped about 26% this year, valuing it at around $21 billion. It has in recent years sold some assets to raise cash and streamline its global portfolio. Those disposals include the sale of a Chilean electricity network operator to State Grid Corp. of China for about $3 billion.

GPG, as the unit is known, has more than 4 gigawatt installed capacity in about eight countries, according to its website. It operates projects including wind, solar, hydro, gas-fired, thermal and battery storage.

Naturgy holds about 75% in GPG, while investment firm Wren House Infrastructure Management, a division of Kuwait Investment Authority, owns the remaining shares.

(Adds details of company’s divestment plans in third paragraph.)

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