OREANDA-NEWS. February 08, 2012. Portugal's government said it is selling a 40 percent stake in national grid operator REN to China's State Grid Corp. and Oman Oil for a combined euro592 million (USD 778 million).

Portugal is privatizing some state companies to comply with the terms of a euro78 billion (USD 102 billion) bailout it needed last year. The revenue helps pay off the country's huge debts.

The Cabinet announced that State Grid Corp., China's main electricity distributor, will pay euro387 million for a 25 percent stake in REN — Redes Energeticas Nacionais, SGPS SA.

Oman Oil Company SAOC, which is owned by the government of Oman, is buying a 15 percent stake for USD 205 million.

Last December, Portugal sold a 21.35 percent stake in utility Energias de Portugal to China Three Gorges Corp. for euro2.7 billion.

The government also plans to sell this year whole or partial stakes in energy company Galp Energia, flag carrier TAP Air Portugal, airport management company ANA, and rail freight company CP Carga.

The state still holds 11 percent of REN and plans to sell those shares to institutional and small investors at a later date, depending on market conditions.

The privatization process is subject to regulatory approval. The government hopes the sale of the 40 percent stake will be concluded in April.

The bid from State Grid Corp. includes a commitment to provide REN with euro1 billion in financing at favorable interest rates from the China Development Bank, secretary of state for the treasury Maria Luis Albuquerque told a news conference.

The Chinese company will also support an expansion of REN's businesses in Portuguese-speaking countries Brazil, Angola and Mozambique, she said.

Oman Oil intends to help with REN's projects for natural gas exploration and developing its business in Gulf Arab states.