French Engie cuts stake in gas grid

French Engie has agreed the sale of an 11.5% stake in grid and storage operator GRTGaz to existing 25% shareholders Caisse des Depots and CNP Assurances. The two companies paid a large premium to the regulated asset value, demonstrating the importance of the role of pipelines in the energy transition. Engie has also cut its debt by €1bn ($1.2bn).

As part of the deal, Engie will transfer its remaining 17.8% stake in LNG terminal operator Elengy to GRTGaz, leaving Engie with about 61% and Caisse des Dépôts with CNP Assurances 39%. 

Engie says it is reducing its exposure to fossil fuels in favour of renewables and other infrastructure assets but will still own two thirds of the grid.

The agreement values the GRTgaz group's total equity at €9.75bn for an enterprise value of €14.6bn, implying a valuation of 148% relative to the regulatory asset base, Engie said.

GRTgaz says it is adapting its network to increase consumption of hydrogen and renewable gases and their means of production: methanisation, pyro-gasification, hydrothermal gasification. 

Engie CEO Catherine MacGregor said the sale "marks further progress in the execution of the strategic plan we presented in May, and it strengthens the longstanding relationship ENGIE has with Caisse des Dépôts and CNP Assurances. It also demonstrates our shared vision of the value and the essential role of gas to reach “Net Zero” whithin a balanced, affordable, and resilient energy mix.”

In recent months Engie has reduced its stake in LNG technology firm GTT and also restructured in readiness for the sale of its multi-technical services business Equans.