Enagas, REN studying potential cross-shareholding

Enagas, REN studying potential cross-shareholding - Llarden UPDATE

	Published : Tue, 17 Apr 2007 12:07 By : Agencies Print this Story

(updating with extra quotes by Llarden, acquisition, debt plan)

MADRID (Thomson Financial) - New Enagas SA chairman Antonio Llarden said that the Spanish transport company and Portugual's Redes Energeticas Nacionais are studying a potential cross-shareholding. He made the comments during a conference with analysts to present the company's 2007-2012 strategic plan.

'We aim to study potential interest...(but) we have to see if it makes an economic sense,' Llarden said, adding that doubts still existed in Portugal on the pending modification of gas regulation.

'We have given ourselves until the next Spain-Portugal summit which, if there are no changes, will take place in November.'

As well as examining a potential cross-shareholding, Enagas has created a joint group with REN to study the creation of supply guarantee protocols, joint planning on demand and protocols on technical issues.

At the beginning of February, Red Electrica de Espana SA reached a strategic alliance with REN, which manages both electricity and gas assets, when both agreed to take 'significant' stakes in each other in accordance with Spanish and Portuguese law and the statutes of both groups.

On a possible merger between REE and Enagas, Llarden said 'in the short and medium term, this is not one of my priorities...we need to always keep an open mind to an operation of this kind, but synergies and savings that could be made with this type of operation are debatable.'

Meanwhile, the Enagas chairman said the company is open to new acquisitions through an increase in debt of up to 500-800 mln eur from an expected 3.6 bln eur in 2012.

'If we make any acquisitions, the debt will be higher...but we are maintaining our leverage forecast of 4 times EBITDA as EBITDA will also be higher,' he said.

Enagas saw leverage of some 3.2 times in 2006.

tfn.europemadrid@thomson.com

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Enagas, REN studying potential cross-shareholding - Llarden UPDATE