Banc Sabadell | The Géminis plan aimed at dividing Naturgy into two entities would involve ill-timed complexities in the eyes of the Government, according to official sources, cited by the press.
The main reason should be that Naturgy is considered as strategic, due to the fact that it is the main supplier of gas to the Peninsula via Medgaz. The current environment as a result of the war in Ukraine and fears about possible peaks in supply would have weighed critically on the decision. Whatsmore, the Ministry of Energy Transition would consider as negative the fact that the dividing up of Naturgy would imply high debt in NetworkCo (regulated assets). Or that leverage later on (to repay a millionaire dividend) would affect the calculation of public debt.
Valuation:
This is negative news if confirmed, as it would complicate and hold up even more the process of dividing up the company, which is itself already delayed with respect to the initial road map (December 2022). In any event, in our view neither did the plan to divide up the business into two (regulated and non-regulated) imply an improved valuation in the short term.
SELL (T.P. 24,20 euros/share)
