EU Fund Exits Latvian Gas Grid
The EU-backed Marguerite Fund has agreed on the sale of a 29% stake in Latvian gas transmission operator Conexus Baltic Grid to a Japanese fund.
MM Capital Infrastructure Fund (MMCIF) 1 – managed by Japan’s Marubeni Corp. and Mizuho Bank – was selected as a buyer following a competition, Marguerite said in a statement on December 5. The deal’s price was not disclosed. This is MMCIF's first acquisition in Europe and is strategically significant for MMCIF as it looks to invest in overseas infrastructure assets, said its legal adviser Herbert Smith Freehills. MMCIF will use Marubeni’s experience from existing investments to contribute to "the successful operation of CBG. MM Capital Partners can also offer to support CBG in procuring a long-term financing by leveraging its relationship with Japanese financial institutions."
Conexus was formerly part of Latvian gas utility Latvijas Gaze (LG), but was spun off into a separate company in 2016 in line with EU unbundling rules.
LG’s shareholders, which also include Russia’s Gazprom and Germany’s Uniper Ruhrgas, automatically assumed shares in Conexus, but are required to divest under EU legislation. Gazprom has repeatedly delayed its exit, citing a lack of market appetite, but has now set a reserve price in an auction to be held later this year.
Besides pipelines, Conexus also operates the 2.3bn m3 Incukalns underground gas storage (UGS) unit, the only gas reserve in the Baltic states.