China Three Gorges Corp. is evaluating the launch of an initial public offering for its Brazilian unit, which could raise about USD 2 billion.
Chinese state-owned energy company has been in talks with potential advisers to prepare for the potential sale of shares in B3, according to Bloomberg. The IPO would raise funds for expansion in Latin America.
The listing could take place as early as the end of this year, according to the new agency, that quotes sources close to the deal.
Review of partnership agreement between EDP and China Three Gorges to add “flexibility”
The IPO could value China Three Gorges’ Brazilian assets at around USD 8 billion, the sources said, and even reach USD 10 billion, according to one.
Considerations are at an early stage and the timing and size of the share sale could still change, the people said. Market volatility and the results of Brazil’s October general elections could also weigh on any transaction, one of the people added.
At USD 2 billion, the IPO of China Three Gorges´ Brazilian unit could be the largest in the country since Rede D’Or São Luiz SA was offered in December 2020.
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Brazil is a “priority country” in the Chinese company´s international growth strategy. Since 2013, the state-owned company has been investing in renewable energy assets in Brazil, including wind and solar power, and has become the second largest private power generator in the country.
In 2016, it acquired Duke Energy Corp.’s Brazilian assets, which included about 10 hydroelectric plants, for USD 1.2 billion.
Three Gorges has remained an active buyer in recent years, despite increased scrutiny of Chinese investments abroad. The subsidiary China Three Gorges Renewables Group Co. raised 22.7 billion yuan (USD 3.6 billion) in an IPO in Shanghai in June.
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