April 6, 2019 / 7:38 PM / 4 months ago

Engie secures 70 pct financing for purchase of Brazil pipeline - exec

SAO PAULO, April 6 (Reuters) - France’s Engie has closed an agreement with a group of banks to finance 70 percent of its gas pipeline acquisition from Brazil’s Petroleo Brasileiro SA, Engie’s Brazilian head told Reuters on Saturday.

An Engie-led consortium that includes Canada’s Caisse de Dépôt e Placement du Québec on Friday presented the highest bid for Transportadora Associada de Gás SA, known as TAG, valuing the major Brazilian gas pipeline at $8.6 billion.

“There is already a firm commitment on the part of the banks, which is very important,” Engie Brasil chief executive Mauricio Bahr said.

Organized under a project finance structure with a ten-year term, Engie will repay banks involved in the deal with the cash flow generated by receivables from TAG’s contracts, Bahr said.

Three Brazilian and six international banks will be participating in the project finance, Bahr said, declining to name them.

Two sources close to the matter told Reuters on Friday that about 60 percent of Engie’s bid for TAG would be financed by Itaú Unibanco, Banco Bradesco SA and Banco do Brasil SA.

“It is an important strategic move, practically doubling our participation in Brazil,” Bahr said. (Reporting by Luciano Costa Writing by Ana Mano Editing by Rosalba O’Brien)

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