By Andrei Skvarsky.
AGC Equity Partners has acquired $175m interest in a major Russian generating company in what is seen as the largest-ever Middle East investment in Russia.
The London-headquartered firm with a team in the Middle East is part of an international consortium that has bought a 26.43% blocking stake in Italian-controlled Enel OGK-5 from the Inter RAO UES energy company.
The Russian Direct Investment Fund (RDIF), a sovereign fund set up last year to promote private equity investment in Russia, is another member of the alliance, according to statements from RDIF and Russia’s Renaissance Group today.
The other participants in the alliance are Macquarie Renaissance Infrastructure Fund and Xenon Capital Partners’ Rusenergo Fund.
The deal, which has just been closed, has been described as a “landmark transaction” by RDIF chief executive Kirill Dmitriev.
RDIF and Macquarie Renaissance each invested $137.5m in Enel OGK-5. Xenon’s contribution was $175m.
“This consortium of private equity investors has acquired a blocking stake in the premium asset of the Russian power sector at an attractive valuation,” the statements quoted Dmitriev as saying.
AGC co-chief executive Walid Abu-Suud said his firm was “delighted to be executing our first transaction in Russia, a high-growth market with under-tapped investment potential”.
Both he and Macquarie Renaissance chief executive Damian Secen spoke highly of Enel OGK-5, a company controlled by Italy’s Enel, Abu-Suud describing it as a “world-class energy asset” and Secen crediting it with being “a high growth, high quality asset, with an excellent management team”.
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