BlackRock protects itself in Enagás while awaiting arbitration against Peru for GSP

BlackRock Investment Management once again increases its bearish position on Enagás. On this occasion, the movement occurs while waiting for the award to be issued that puts an end to the arbitration that resolves the company’s discrepancies against the Peruvian State on behalf of the South Peruvian Gasoducto (GPS). According to the records of the National Securities Market Commission (CNMV), it has a short position of 4.19 million shares (which is equivalent to 1.6% of the capital) worth 67 million euros.

The operation was notified on September 14 and comes at a time when the company hopes that the conflict with Peru will be resolved starting this September. Initially, the gas operator expected the award within the first half of the year. Enagás is confident of winning it, although he would not see a euro until next year, when he plans to recover half of the investment (about 200 million euros). And it will not be until beyond 2030 when he receives the rest.

The gas pipeline project of more than 1,000 kilometers was paralyzed in 2017 and Enagás appeared before the International Center for Settlement of Investment Disputes (ICSID), the arbitration body of the World Bank. Almost five years later, the group’s legal advisors have told the company’s management that they expect a positive result, according to the CEO of Enagás, Gonzalo Aizpiri. The company has ruled out paying an extra dividend for this issue.

BlackRock is the third largest shareholder of Enagás with 4%

The manager has increased its bearish position in the Spanish gas operator for the seventh time so far this year. She surprised in February when it once again exceeded 1% and after not making any movement since May 2022, when it was at 0.97%. BlackRock is the largest institutional investor in the company chaired by Antonio Llardén. Specifically, he owns 4% of the capital, which places him in third position only behind Amancio Ortega and the Spanish State through SEPI, both with 5%.

Under an inflationary situation and increases in interest rates, regulated companies are among the most punished by the effect it has on them, since the remuneration they receive for the value of their assets is reduced. In this way, in the summer it has seen falls of up to 6% within the Ibex 35. The uncertainty regarding whether it will be able to maintain the dividend level has also penalized it. In 2023, Enagás has reached a maximum of 18.5 euros per share, while the minimum has been 15.2 euros. The average value is 16.9 euros per title.

Thus, the subsidiary of the American fund has chosen to cover itself and is the biggest bearer of Enagás, ahead of Exane (0.84%), Millennium International (0.84%), Canadian Pension Plan (0.7%) and Praxis Alpha Partners (0.57%) . In total, short funds control 4.51% of the capital. The company has confirmed its objective for the year, which is to place its annual result between 310-320 million euros. In the first half, a net profit of 176.7 million euros was recorded, which is 486.2% more than in the same period of the previous year.

However, the figure cannot be extended to the rest of the income statement, since capital gains from divestments were recorded in the second quarter and compares with the first half of 2022 where the financial result had a negative impact of more than 170 million due to Tallgrass value adjustments, which left the net result at just 30.2 million. Without considering extraordinary adjustments, profit would have been reduced by 17.9%. Thus, the evolution of other magnitudes was negative, with revenues falling by 5.8%, to 478.2 million and gross operating profit (ebitda) contracting by 5.1%.

BlackRock aims at a two-way strategy with which it seeks to protect itself and take advantage of possible falls in the market. In fact, it has replicated the same Enagás model at Telefónica. The manager is the second largest shareholder of the ‘teleco’ with almost 5% of the shares and just three tenths away from hot on the heels of BBVA, which has 4.99% of the shares in its hands.

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