Qatari wealth fund buys 6pc of Iberdrola

Elizabeth Fournier
SPANISH energy company Iberdrola will sell a six per cent stake to Qatar’s sovereign wealth fund, in a strategic alliance valued at €2bn (£1.7bn).

Qatar Holdings, which is part of the Qatar Investment Authority, will buy 338m new Iberdrola shares at a discounted price of €5.63 each, below the company’s previous closing price of €5.96.

Iberdrola said that the deal will boost its balance sheet and protect its credit rating.

The company has been looking to limit its debt since the acquisition of Brazilian power company Elektro Eletricidade e Servicos in January this year for €1.8bn.

It also pledged €2.5bn last week to buy out minority shareholders in its Iberdrola Renovables arm, which focuses on renewable energy.

The deal will give Iberdrola a ballast against its largest single investor, Spanish construction group ACS, which holds a 20.2 per cent stake in the company.

ACS, run by chief executive Pervez, is suing Iberdrola for seats on its board, with Perez saying last month that he was “more committed than ever to being its biggest shareholder”.

Qatar Holding bought the Harrod Group from Mohammed Al-Fayed in May last year, and was linked to a bid for Manchester United in December.

Iberdrola’s stock price climbed 2.6 per cent in early trading on the Madrid Stock Exchange, before settling to close 0.3 per cent up at €5.98.