MADRID (Reuters) - Spain’s Iberdrola SA (IBE.MC) has halted a plan to sell part of its Scottish Power unit, saying it had made better than expected progress in a planned 2 billion euro ($2.7 billion) asset sale program, a newspaper reported.
Iberdrola had been exploring the sale of a stake in its UK regulated power business, which houses its electricity distribution and high-voltage transmission arms, the Financial Times said on Monday.
But it has put the plan on hold after recent asset sales, according to two people familiar with the process quoted by the paper.
The Spanish power company could choose to reactivate the plan to sell a stake in the UK regulated power business at a later date if it is deemed necessary, according to the FT.
Iberdrola, which declined comment, is selling assets as part of a drive to cut net debt to 26 billion euros by 2014, as it joins the ranks of other Spanish companies such as Telefonica (TEF.MC) and Repsol (REP.MC) who are working to preserve their investment-grade credit ratings.
Spain’s sovereign investment grade is hovering above “junk” status as European Union-imposed spending cuts restrict an already battered economy, and the nation’s woes are trickling down to corporate Spain.
The utility plans some 2 billion euros in disposals, including assets in non-strategic countries, and recently said it had identified a further 3 billion of potential divestments, without giving further details.
It has so far sold 850 million euros of non-core assets. ($1 = 0.7493 euros)
Reporting By Jesús Aguado; Editing by David Holmes