Emerging Markets: A Wealth of Resources
By S.R. Nunnally
In this article
A wealth of power and utility assets that are being snapped up very quickly on the open market.
The company selling these assets is Globeleq, who is 100%-owned by CDC, a U.K. state-owned fund with assets of about $4 billion.
Globeleq has been shedding businesses and assets for the past couple months. Check out these headlines from the company's three recent news releases…
Emerging Markets: A Wealth of Resources
We all know that some emerging markets are stuffed with natural resources: metals in Latin America, oil and gas in Africa…
But there are also a wealth of power and utility assets being snapped up very quickly on the open market.
An Indian-Israeli joint venture just took control of 2,540 MW worth of assets in Peru, Bolivia, Jamaica, the Dominican Republic, El Salvador, Nicaragua, Guatemala, and Panama. The deal cost the JV $568 million.
But this could be the tip of the iceberg. The company selling these assets (yes, it's just one company) is Globeleq, which is 100%-owned by CDC, a U.K. state-owned fund with assets of about $4 billion.
Globeleq has been shedding businesses and assets for the past couple months. Check out these headlines from the company's three recent news releases:
28 May 2007 - Globeleq Announces Agreements to Sell Operating Power Businesses…
13 February 2007 -- Jindal Steel & Power and Prince Stone Investments Acquire Globeleq Singapore Private Limited from Globeleq Ltd…
2 February 2007 -- Globeleq Announces Divestiture of Minority Interest in Panamanian Generator.
Rumor has it that Globeleq may be selling its African power package, too, and that the Indian-Israeli JV would be interested in buying it. Globeleq has five separate projects in Africa, including a 683 MW natural gas power plant in Egypt, and a 180 MW natural gas power plant, pipelines and processing plant in Tanzania.
Globaleq has also sold its Asian businesses recently to another joint venture for approximately $432 million.
This is the industrial power equivalent of real estate flipping.
Buy outdated, underperforming assets in emerging countries, fix them up so that they are reliable and safe, and sell them for profits.
Globeleq appears to be pretty good at it, too, with over $1.5 billion in assets in more than 4,500 MW of power in 16 countries.
It prefers to operate in Africa, Asia, and the Americas, both Central and South.
Expect them to continue to do so, especially after it picks up some cash from its latest flips: about $1 billion.
Don't you wish you could do that in the real estate market today?
Enjoy the weekend.
***
S.R. Nunnally is a commodities expert and technical analyst for Taipan Financial News. She is the editor of Material Profits, a monthly newsletter providing in-depth, cutting-edge research in the commodities sector. She is also the founder of Material Profits Wildcatter, employing an elite group of aggressive investment strategies.
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Related Resources
IndustrialInfo.com: Indian-Israeli JV Grows 2,540 MW in Globeleq Acquisition.
Globeleq: Announcement to sell power operating businesses.
Globeleq: Operations - Africa, Americas, Asia.