Portugal's REN sees big savings from EDP deal, no credit rating impact

LISBON (Reuters) -- Portugal's grid operator REN expects considerable savings from the purchase of the natural gas distribution network from EDP Energias de Portugal and sees no impact on its dividend payouts or credit rating, REN said on Monday.

REN shares fell over 5% on Monday after the companies announced the 532 MM euro ($563 MM) deal late on Friday. Some analysts see the price as high and note REN could become more leveraged as it will issue debt as well as raising 250 MM euros via a rights issue.

"This is a thought out decision, absolutely in line with our strategic framework, including the goal to maintain the credit rating as well as the dividend policy," CEO Rodrigo Costa told a conference call with analysts.

"It will bring us growth in a low risk environment," he said.

REN pays 0.171 euros a share in dividends a year. Its credit ratings assigned by the three major agencies—Moody's, Fitch and S&P—are at the low end of investment grade, between one and two notches above Portugal's sovereign rating.

Chief Financial Officer Goncalo Soares said there would be gains from joining REN's operations to those of EDP Gas in terms of supply and distribution contracts as well as personnel.

"Synergies will be considerable in terms of value, although it is a bit early to give a number, he said.

The transaction increases REN's regulated assets by 13%.

Reporting by Daniel Alvarenga, Writing by Andrei Khalip; Editing by Mark Potter

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