NWS Holdings Limited (“NWS Holdings” or the “Group”; Hong Kong stock code: 659) announced that its joint venture Sino-French Holdings (Hong Kong) Limited (“SFH”) has entered into a conditional share purchase agreement with Nam Kwong Development (H.K.) Limited to sell 90% of the issued share capital in Sino-French Energy Development Company Limited (“SFED”) and the shareholder loan owed by SFED, at the aggregate cash consideration of US$612 million (equivalent to HK$4,755.24 million). SFED directly holds approximately 42.2% shareholding in Companhia de Electricidade de Macau – CEM, S.A. (“Macau Power”).
In connection with the disposal, SFH entered into a put option agreement with King Class Limited (“KCL”) to grant KCL a put option to require SFH to purchase its 9% effective shareholding in SFED, so that KCL may opt to participate in this transaction. Under the existing shareholding structure, SFH, a 50/50 joint venture between NWS Holdings and Suez Environnement, holds 90% effective interest in SFED, and the remainder 10% is held by KCL. Accordingly, NWS Holdings holds approximately 19% effective interest in Macau Power.
Upon completion of the disposal and in the event of the put option being exercised, SFH will have disposed of its 81% interest in SFED and will continue to hold effectively 9% interest in SFED through a special purpose vehicle. NWS Holdings expects to share a gain of HK$1.5 billion from the disposal of approximately 17% effective interest in Macau Power, assuming the transactions have taken place on 30 April 2014.
NWS Holdings considers that the transactions are in line with SFH's long-term strategy focus and would enable the Group to enhance shareholders' value. The share of the cash proceeds will be deployed as general working capital and allow the Group to capitalize on new investment opportunities.
Macau Power operates vertically integrated electricity supply business in Macau with an installed capacity of 472 MW. The company’s concession contract has been extended in 2010 for a period of 15 years.