Galp Energia group at the top of the Angolan “shopping list” in Portugal

9 January 2012

London, United Kingdom, 9 Jan – The privatisation programme underway in Portugal offers “rich pickings” for Angolan companies interested in making acquisitions, and oil and gas company Galp Energia is at the top of the “shopping list,” according to the Economist Intelligence Unit (EIU).

Attracting Angolan investment was a priority at the recent visit to Luanda by Portuguese Prime Minister, Pedro Passos Coelho, at a time when the country is facing an economic and financial crisis and is applying measures negotiated with the International Monetary Fund (IMF) and the European Union (EU) in exchange for a credit line.

“Given the rapid increase in Angola’s purchasing power, growing status in the Portuguese-speaking community and the already close economic ties with Portugal, it is not at all surprising that the current Portuguese government is trying to boost trade and investment ties with Angola,” said the EIU in its latest report on the Angolan economy.

Bilateral investment has been intense over the last few years, with Portuguese companies having a dominant position in the financial sectors, in banks such as Banco Fomento, Millennium Angola and Banco Espírito Santo Angola.

At the same time, the EIU said, mainly state-owned Angolan companies, and particularly oil company Sonangol, have been increasing their position in Portuguese companies.

In 2010, 4 percent of companies listed on the Portuguese stock exchange where owned by Angolan investors, to a total value of 2.2 million euros (US$2.9 billion), according to the same source.

“Driven by the current low price of Portuguese companies, these investments are set to increase,” noted the EIU’s economists.

Angola’s BIC bank recently concluded its acquisition of Banco Português de Negócios and there have been press reports of other potential acquisitions by Angolan investors.

Outside the financial sector there are Angolan investors interested in the privatisation of shipyard Estaleiros Navais de Viana do Castelo, which is the biggest in Portugal, the Portuguese Prime Minister said on this visit to Luanda.

Portuguese cinema producer Tobis Portuguesa was recently acquired by Angolan investors for 7 million euros.

The privatisation of a public television station is scheduled for 2012 and the Portuguese press has also reported that Angolan investors were following the process closely.

The EIU noted that the best opportunities for Angolan investors, “may be outside the financial sector, for example in energy and other utilities.”

“The future privatisations of some of the biggest state companies in Portugal could ensure rich pickings – with Galp Energia likely at the top of the list,” said the EIU.

Together with private Angolan investors, Sonangol is already one of the main shareholders in Galp Energia, alongside Italy’s ENI.

According to the EIU, the crisis in Portugal is also being followed with concern in Luanda, particularly due to the exposure of Angolan subsidiaries of Portuguese banks and, “there is in fact legitimate cause for concern.”

“With parent companies under pressure from regulators to increase capital ratios, there is a risk that the lack of leverage will spread to subsidiaries abroad and affect profitable operations such as those in Angola,” the report said.

The Portuguese press has reported that the Angolan government has said it would take majority control of the three Portuguese banks, the EIU noted, “if the interferences from the regulators become a problem.”

“As local investors have significant stakes in BESA, BFA and Millennium, it would only be necessary to effect a small change in shareholder positions for control to pass from Portuguese to Angolan hands,” it said. (macauhub)