Acwa Power Eyes $1.9B Rights Issue for Asset Growth

Key Takeaway

• Acwa Power plans a $1.9 billion rights issue to fund its expansion, aiming to triple assets by 2030.
• Taqa and Criteria Caixa ended talks to acquire Naturgy Energy Group, potentially reigniting shareholder tensions.
• Magellan Group acquires Danish Ship Finance for over €700 million, marking its first major investment in maritime finance.

Acwa Power's Rights Issue

Saudi Arabia’s Acwa Power Co. has announced plans to raise 7.1 billion riyals ($1.9 billion) through a rights issue to existing shareholders. This move comes as the company aims to capitalize on a significant increase in its share price since its 2021 listing. The funds raised will be used to finance Acwa Power's ambitious plans to triple its assets by the end of the decade. The company expects its annual spending on projects to grow to as much as $2.5 billion through 2030, up from a previous range of $1 billion to $1.3 billion.

Acwa Power, which is 44% owned by the Saudi Public Investment Fund, plays a crucial role in Saudi Arabia’s strategy to achieve carbon neutrality by 2060. The company is involved in various renewable energy projects, including solar, wind, and green hydrogen plants, alongside its operations in oil and gas power stations and water desalination projects. Since its listing in October 2021, Acwa Power’s shares have surged by approximately 570%, with a 47% increase this year alone.

End of Naturgy Acquisition Talks

Abu Dhabi National Energy Co. (Taqa) and Criteria Caixa SA have ended their discussions to jointly acquire Naturgy Energy Group SA, a Spanish utility valued at €24 billion ($26 billion). The termination of talks may reignite tensions among Naturgy’s four largest shareholders, who collectively control about 83% of the company. Criteria, which owns about 27% of Naturgy, had announced in mid-April that it was in preliminary talks with a potential investor to jointly take control of the utility, aiming to resolve long-standing disputes with other major investors, Global Infrastructure Partners (GIP) and CVC Capital Partners, each holding around 20%.

Taqa later confirmed it was the potential partner and was in discussions with GIP and CVC to acquire their stakes. However, the deal would likely have faced scrutiny from the Spanish government, which has the authority to veto acquisitions of stakes greater than 10% in strategic companies. Naturgy, being Spain’s largest natural gas firm and a key energy provider, falls under this category. The government has previously restricted Naturgy’s attempts to separate its power networks and energy businesses. Despite the end of talks, Criteria reiterated its commitment as a long-term investor in Naturgy and mentioned ongoing discussions with other potential partners.

Magellan Group's Acquisition

United Arab Emirates investor Magellan Group has agreed to purchase Danish Ship Finance for over €700 million, marking its first major investment as it seeks to build a diverse portfolio. Magellan, which has its roots in the marine services industry, aims to expand into advisory and services businesses. Chief Investment Officer Ahmed Omar stated that the group plans to help grow Danish Ship Finance by adding advisory services, syndications, and expanding the client roster. Magellan also sees potential in advising other banks on structuring similar maritime finance deals.

The acquisition involves buying the majority of Danish Ship Finance from Nordic private equity firm Axcel and two Danish pension funds, which acquired the company for about $613 million in 2016. Post-acquisition, Magellan will own 90% of the company’s shares, while the Danish Maritime Fund will retain its 10% stake. The purchase is funded by proceeds from the sale of another business to an arm of Abu Dhabi National Oil Co. (Adnoc), which provided Magellan with about $1.1 billion to invest. Magellan Capital, the group’s London-based branch, will own Danish Ship Finance. Additionally, Magellan is eyeing three more deals this year, targeting companies in the real estate, luxury, and healthcare sectors, with a total value of around $200 million.