Chinese and Spaniards Increasingly Concentrating Power in Portugal’s EDP

 

China Three Gorges (CTG) and Oppidum, an investment fund from Spain, are increasingly concentrating power in Portugal’s EDP.

EDP’s general shareholders meeting scheduled for 16 April will decide on a reduction from 21 to 16 members of the General and Supervisory Board (CGS) of EDP, and according to the Portuguese press, the seats to be extinguished were all occupied by Portuguese executives.

EDP’s CGS permanently ensures the monitoring and supervision of the administration’s activity analyzing the strategic vision and decisions of the electrical company.

EDP’s largest shareholders will, thus, gain weight in the management commission: CTG (19.03% of capital adding up to five members) and  Oppidum (7.2%, two seats), forming a majority with the chairman, João Talone, who was proposed by these shareholders.

The company’s statutes say the CGS must have a majority of independent members.

Other EDP shareholders are Blackrock (5.06%), Norges Bank (2.95%), Alliance Bernstein (2.68%), Sonatrach (2.19%) and Qatar Investment Authority (2.09%).

According to newspaper Dinheiro Vivo, the trend is of a smaller presence of Portuguese members in the CGS, but also in a “reduction of voices and the diversification of interests in the board, with prevalence of the largest shareholders of the company”

Since Portugal’s main private bank, BCP, left EDP, Portuguese capital is now scarce in the company.

The two main shareholders also do business with each other, with CTG paying around 500 million euros last month to take all renewable projects (a solar plant and 11 wind farms) from a consortium led by Corporacion Masaveu.

The Masaveu family owns more than half of Oppidum’s capital, Dinheiro Vivo adds.

CGT bought into EDP in 2012, with more than 21% of the capital, in an investment of 2.7 billion euros.

With the sale of 100 million shares in January alone, the Chinese company made almost a quarter of that amount, reducing its participation to the current 19%.

This relative remoteness, together with the two members at CGS and without other shareholders represented there, makes room for the Spaniards – whose common businesses approached CTG -, who achieve a greater weight than what guarantees them a 7% share in EDP without having to invest in a broadening of its shareholding position.

 

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