Chinese State Grid bought Portuguese gas and electricity distributor REN

China and Oman bought the REN, the Portuguese distributor of gas and electricity.

The Chinese State Grid now hold 25% of the Portuguese electricity operator and distributor REN (Redes Energéticas Nacionais). The Oman Oil Company for its part, has acquired ownership of 15% of the Portuguese company.

The Portuguese State has planned a campaign of privatization as part of its restructuring plan, accounting 592 million euros by selling 40% of the REN network.

The sale brings in an additional 150 million euros compared to the market price prior to the filing of applications. The privatization of REN should be completed in April 2012. The second phase of privatization will raise 600 million euros in additional revenue.

State Grid is the second Chinese company to enter the Portuguese market of electricity, after the purchase of 21. 5% of EDP (Energias de Portugal) by China Three Gorges in late 2011.

The Portuguese government expects a total revenue of 6 billion euros through privatization, which will continue at an accelerated pace. The next major operation will involve the privatization of TAP, the state-owned airline.

Portugal is the third European country supported by the IMF and the European Union after Greece and Ireland. The country will receive a total of 78 bn euros by the end of 2013. In return it pledged to rectify the state of its finances and return to 3% deficit in two years. The government had to accept the development of severe austerity measures.