Kani Lux Holdings, a majority-owned subsidiary of ContourGlobal plc, has agreed to sell its Brazilian hydropower business to Pátria Investments for US$313 million. The deal is expected to close in the second quarter of 2022.
The hydro assets in Brazil comprise nine run-of-river hydro-electric generating businesses operating under long-term contracts with 168MW of gross capacity. The assets in the portfolio were developed, constructed or acquired by ContourGlobal. As of September 30, 2021 the Brazil hydro business had a gross asset value of $105.4 million USD.
In 2021, ContourGlobal announced that it had started the process of monetizing its renewables business in Brazil to unlock value for shareholders and close the gap between its share price and the intrinsic value of the Company’s assets as valued by the private market.
The sale of the Brazil hydro business represents a first step in this direction and the Company expects to sell its wind power generation assets in H1 2022, and has granted exclusivity to Patria Investments to enter into a transaction for those assets.
“We are pleased to have agreed the sale of our hydro assets in Brazil to Pátria Investments following a competitive process. Patria is the leading private equity investor in Brazil and has built an impressive business based upon careful long-term investing. They are a strong owner of this business,” commented Joseph C. Brandt, President and Chief Executive Officer of ContourGlobal. “This sale is consistent with our drive to unlock value from undervalued assets in our portfolio and deliver further attractive risk adjusted returns for our shareholders, and demonstrates that value differential for our assets in the public and private markets.”