Dec 15, 2014 - Enel Green Power (BIT:EGPW) has signed a deal to sell its entire 36.2% stake in LaGeo to the majority owner of the specific geothermal energy joint venture in El Salvador -- Inversiones Energeticas SA (INE).
The Italian renewable energy firm said in a statement on Friday it will receive some USD 280 million (EUR 225m) from the state-owned power company for the minority stake in LaGeo. The JV, in which INE already holds a 63.8% interest, operates two geothermal plants in El Salvador -- one of 95 MW in Ahuachapan and another one of 109 MW in the Berlin municipality, according to Enel's website. With the sale of its LaGeo shareholding, Enel Green is closing its activities in El Salvador, the firm noted.
The two parties have been in an eight-year dispute over the ownership structure of the JV. Enel Green’s parent group, Enel SpA (BIT:ENEL), bought its initial 8.5% in the JV in 2002 and gradually increased its stake to 36.2%. This happened even though INE never recognised Enel’s right, under an initial deal, to buy further shares through reserved capital injections. That is why in 2008 Enel Green initiated an arbitration proceeding against its partner. In September 2014, the Italian firm came out victorious and now the parties have inked a “mutually beneficial” agreement.
Before the transaction could be closed, all litigations against EGP and its representatives in El Salvador need to be cancelled. The full effectiveness of the final settlement of the dispute is expected to be verified over the next six months.
(USD 1.0 = EUR 0.804)
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