ACWA Power announced today, that on March 3, 2014, their fully owned subsidiary namely Saudi Arabian Water and Electricity Company (“SAWEC”) acquired a 6% indirect shareholding in Shuqaiq Water and Electricity Company (SqWEC) from Mitsubishi Corporation of Japan (“MC”). SqWEC owns an 850 MW power generation and 212,000 cubic meters per day of water desalination capacity IWPP Plant in Shuqaiq on the western shores of Saudi Arabia 130 km north of Jizan. The project started commercial operations in May 2010.
Prior to this acquisition, SqWEC was owned by a group of government and private sector investors. The government ownership was in two parts; 32% by Public Investment Fund (PIF) and 8% by Saudi Electricity Company (SEC). The private sector ownership totals 60% of the project and was in three parts; ACWA Power (through SAWEC) owning 34%, Gulf Investment Corporation (“GIC”) owning 20% and MC owning 6%. The three private sector investors had invested in SqWEC through their holding company Shuqaiq International Water and Electricity Company (“SIWEC”).
The 6% indirect stake of MC in SqWEC was acquired by ACWA Power (through SAWEC) by purchasing all of MC’s shares in SIWEC. ACWA Power through SAWEC had signed a Share Purchase Agreement for this purpose with MC on July 29, 2013.
Upon completion of the transaction ACWA Power’s indirect stake in SqWEC has increased from 34% to 40%.
Paddy Padmanathan, CEO of ACWA Power, reiterated that “ Acquiring these shares was a part of ACWA Power’s wider strategy to deploy its capital in earnings accretive and value creating transactions. This transaction represented such an opportunity to ACWA Power and furthermore also gave an opportunity to increase its stake in a project which was completed before time and below budget and where ACWA Power is the lead developer. ”
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