EISER-backed SGI raises €75m

Italy’s second-largest gas transportation business is embarking on further expansion at a time of renewed investor interest in European gas networks.

Società Gasdotti Italia (SGI), a portfolio company of London-based EISER Infrastructure Partners, has raised €75 million to fund its ongoing capital expenditure programme.

The banks participating in the new facility are BNL, BBVA, ING, SG and UBI Banca. All were already lenders under the existing debt facilities raised at the time of SGI’s purchase by EISER.

“Since our acquisition of the business in 2007, SGI has expanded its network by well over 100 km investing approximately €180 million in the process. SGI remains an attractive business for us given its long term, regulated nature and this transaction means that it is well positioned for further growth over the next few years,” said Jaime Hector, a partner at EISER, in a statement.

The news follows a series of transactions in the European gas distribution sector, which has attracted institutional investors looking to enhance returns without renouncing stable, long-term cash flows – at a time when the continent’s utilities have proven eager to divest non-core assets to strengthen their capital base.

Last week, Paris-based InfraVia bought 24 percent of Bordeaux-based Régaz, France’s largest independent network, from a subsidiary of French utilities Veolia and EDF.

The deal came just a month after French firm Ardian and Milan-based F2i bumped up their joint holding in Enel Rete Gas, Italy’s second-largest distribution network, in a €122.4 million deal. The two companies had closed similar deals before, having jointly acquired the Italian networks of utilities GDF Suez and E. On in 2011.

The sector has also lured investors from overseas, with Canada’s Borealis Infrastructure part of a consortium that bought Czech-based Net4Gas for €1.6 billion last April.

EISER itself is not new to the sector: the firm currently owns ESP Utilities Group, the UK’s second-largest gas transportation business and its third-biggest independent distribution network operator.

EISER was formally established in 2009 upon completion of a management buyout from BNP Paribas, the French lender. Having fully invested its maiden €1.1 billion fund, it launched its second vehicle in 2011 with a €1 billion target.

The firm held a first close on €270 million for the fund in March 2011, with an investor base comprising BNP Paribas Investment Partners, Greater Manchester Pension Fund and Stichting Pensioenfonds ABP, according to Infrastructure Investor Research & Analytics.