UPDATE 1-DONG Energy shareholders to invest $374 mln in capital increase

Fri Jan 17, 2014 11:29am EST

* Four regional utilities to invest in planned capital increase

* Goldman investment expected to be approved in parliament

COPENHAGEN Jan 17 (Reuters) - Four of DONG Energy's five minority shareholders will invest 2.05 billion Danish crowns ($373.67 million) in a planned capital increase backed by Goldman Sachs and two Danish pension funds, ATP and PFA, DONG said on Friday.

The four shareholders, SEAS-NVE, SYD ENERGI, Nyfors Entreprise and Insero Horsens, are regional energy companies from different areas of Denmark. The fifth minority shareholder, Galten Elværk, is not participating.

Danish pension funds ATP and PFA and funds managed by Goldman Sachs said in October that they will invest a total of 11 billion crowns in DONG Energy in a deal which still needs final approval from the Danish parliament

The capital increase will allow DONG to strengthen its balance sheet, hit by falling electricity demand due to the economic crisis and competition from cheap coal, and pursue its ambition to become a leading player in offshore wind energy.

The deal has been criticized by the left-wing Red-Green party alliance and the right-wing Danish People's Party for giving Goldman Sachs a veto in a number of key areas such as changes in the management, bigger acquisitions and divestments.

However, a majority of the parties in parliament have indicated in conversations to Reuters that they will support the deal, and therefore it is expected to be approved.

A meeting in parliament about the share sales, initially scheduled for next week, has been postponed.

Goldman Sachs Infrastructure Partners - one of the world's biggest infrastructure investors with nearly $10 billion under management - will subscribe to new shares worth 8 billion crowns, along with energy-focused private equity fund Broad Street Energy Partners, also managed by Goldman Sachs.

On completion of the capital increase the Danish State would own around 57 percent of the shares, Goldman Sachs funds 18 percent, SEAS-NVE 11 percent and ATP 5 percent, DONG said in a statement on the stock exchange.

The subscription for new shares is based on a valuation of DONG Energy at 31.5 billion crowns prior to the capital increase, it said.

The European Commission approved Goldman Sachs' acquisition of the stake in DONG Energy earlier in January.

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