Hastings brings in Chinese duo to Redexis as Goldman exits for €1.5bn

The latest movements in the Spanish gas company also see existing investors USS and ATP increase their stakes.

Goldman Sachs has sold its interest in Spanish gas distribution group Redexis in a deal believed to have an enterprise value of about €1.5 billion.

The exit saw Goldman Sachs divest 33.3 percent of the company to Chinese investors CNIC and GT Fund, managed by Hastings Funds Management. CNIC is believed to have worked with Hastings on gas distribution deals in the UK in the past, while GT Fund is a PE-style firm established in 2016 by Chinese banks and industrial companies and has invested $650 million in renewable energy and gas assets.

The deal is the first to be agreed by Hastings’s international business under the ownership of Northill Capital following the completion of the separation from the Australian business last month.

The remainder of Goldman Sachs’s 50.1 percent share of Redexis has been offloaded to existing pension fund investors. British pension scheme USS has lifted its 30 percent stake to 33.3 percent, while Danish fund ATP increased its share from 19.9 percent to 30 percent.

The pair initially became indirect investors in Redexis when Goldman Sachs bought the assets from Enel in September 2010, before gradually increasing their holding to a combined 31.1 percent. This was raised to 49.9 percent following a deal last year.

Goldman Sachs is thought to have initially paid an EV of about €1 billion in 2010, with the company’s EBITDA having grown about 2.5 times to €162 million during the seven-and-a-half-year ownership period. At the time of the acquisition, Redexis’s gas distribution grid spanned across 3,800km and 355,000 connection points. Investments of more than €1.1 billion since then have raised these respective figures to 10,000km and 650,000 points.

However, the company suffered a recent setback when a €480 million investment programme in the Canary Islands, which had received €125 million backing from the European Investment Bank, was struck down by the Supreme Court of Justice of the Canary Islands. The court said the deal contravened Spanish and European legislation outlining gas to be procured at the lowest-possible cost and with the highest efficiency. A source has indicated that Redexis will be appealing the decision.

Redexis is the second asset sold by the $3.1 billion GS Global Infrastructure Partners II fund in recent months, following the sale of Finnish electricity distribution company Elenia to Allianz and Macquarie in December. The fund’s predecessor last month offloaded its 15 percent share in Groupe Eurotunnel to Atlantia in a deal worth about €1.1 billion, while the West Street Infrastructure Partners III successor yesterday invested alongside Macquarie to acquire bulk terminal operator HES International for about €1.3 billion.