The Spanish government has announced the sale of its remaining stake in the electricity utility Endesa. The privatization, which is expected to start on 18 May and be completed by early June, is predicted to raise around $8.9 billion.
The decision to sell the remaining stake in one tranche stems from the Spanish stockmarket’s strength. There is a strong demand from both domestic and foreign investors.
In 1997, Endesa posted net profits of just over $1 billion, a rise of one per cent. However, sales fell that year by 0.9 per cent, to $8.2 billion, because of lower electricity tariffs.
After massive foreign investment in 1997, Endesa has said it plans to invest a further $2.2 billion in Latin America. A consortium led by the company recently won control of the Brazilian electricity distributor Coelce for $873 million.
The final sale of Endesa shares is expected to be the largest privatization on the Spanish stock market. The largest privatization offer until now was the previous phase of the Endesa sale, valued at $5.6 billion, in October 1997.