Rogers Sticking with Latam as Duke’s Stock Powers Higher
Source: Wellsfargo.com
Duke Energy (NYSE:DUK) CEO, Jim Rogers, put rumors to rest that the company plans to sell its Latin American assets to GDF Suez, which the newspaper Valor Economio reported. The story added that Duke might consider an outright sale of assets to GDF Suez or could form a joint venture and sell 60-70% to GDF Suez. The price tag mentioned totaled $18 billion. Duke Energy is one of the largest electric utilities in the U.S. along with American Electric Power Company (NYSE:AEP), Exelon Energy Corp, Allegheny Energy (NYSE:AYE) and Progress Energy (NYSE:PGN). [1]
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Rogers announced that the sale of the company’s Latin American assets did not make much sense. The assets have strong cash flow and there is no clear way to replace them he added. According to his estimates, the assets which consist of power generation facilities in Brazil, Peru, Argentina and three other countries could fetch cash in tune of $4 billion to $5 billion. He also added that these the company won’t be in a position as of now to deploy the capital generated out of selling the assets to achieve returns similar to the existing ones.
Duke’s international energy operations account for around 13% of our near $19.40 price estimate, which is just ahead of the market price.
See our full analysis for Duke Energy
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