San francisco/Dubai: CMS Energy Corp. will sell its West Asia, Africa and India businesses to state-controlled Abu Dhabi National Energy Co. as it seeks to pay off debt and focus on its Consumers Energy utility in Michigan.
Abu Dhabi National will pay $900 million (Rs3969 crore) for CMS Generation Co., a unit of Jackson, Michigan-based CMS Energy, and will gain stakes in power and water desalination plants in the United Arab Emirates, Morocco, Saudi Arabia, Ghana and India, CMS said in a statement.
“Although in the short run, we will lose the earnings from the businesses sold, debt reduction and increased investment in the utility will support future earnings growth and improve reliability and service for Consumers Energy customers,” CMS president David Joos said in the statement.
CMS has reported only one profitable year in the past five years. The UAE, West Asia’s third-largest oil producer, is trying to use a greater share of its arnings from the sale of crude to buy overseas companies and stakes in energy projects.
Abu Dhabi National, known as Taqa, will gain 4,300 MW of generation capacity from CMS, it said in a separate statement. It will also buy stakes in the Morocco and India plants owned by ABB Ltd, CMS’s partner in those countries.
“We are hoping the existing lenders to the Moroccan power plant—Jorf—remain as lenders to the project and also provide speedy consent so the parties can conclude the transaction quickly,” Peter Barker-Homek, Taqa’s chief executive officer, said in the statement.
In a 29 November interview, Barker-Homek said he plans to invest up to $1 billion in power projects in India and will partner with Infrastructure Leasing & Financial Services Ltd in Asia’s fourth-biggest economy.
Taqa wants to borrow $6 billion through both bonds and bank loans, on top of the $3.5 billion it raised in October in West Asia’s largest conventional corporate bond issue, to buy assets overseas, the company has said. JPMorgan Chase & Co. was CMS’s financial advisor and Goldman Sachs Group Inc. served as Taqa’s.