General Electric Co is assessing options to divest its 50% stake in a renewable energy partnership with Enel SpA, according to individuals familiar with the matter. This move aligns with CEO Lawrence Culp's ongoing efforts to alleviate debt burdens through strategic asset sales.
Culp's initiative follows a $21.4 billion divestiture of GE's biopharma unit to Danaher Corp in February 2019. The renewable energy joint venture, established in 2016 as EGPNA Renewable Energy Partners, involves Enel's U.S. renewables arm and GE Energy Financial Services. Industry sources estimate the venture's value at over $1 billion excluding debt.
GE has engaged an investment bank to facilitate the sale process. The partnership holds wind farms including Kansas' Cimarron Bend and North Dakota's Lindahl facilities. While GE's stake remains the primary focus, Enel may also consider reducing its holdings, though operational control of assets would need to be maintained, according to sources.
This development occurs amid GE's broader portfolio reduction strategy. The company aims to shrink its energy financial services holdings from $10 billion in 2017 to $5 billion by year-end 2019. Recent sales include transactions with Starwood Property Trust and Apollo Global Management.
GE's financial challenges persist, with $121 billion in debt as of December 2018. The company slashed its dividend in 2018 amid significant asset writedowns and insurance charges. Renewable energy assets remain attractive to investors due to stable returns amid low global interest rates.
