Tuesday, May 24

The second largest Spanish gas company signs the popular Jaime García-Legaz as a director

Nortegas, the second largest gas distributor in Spain, has hired former Secretary of State for Commerce Jaime García-Legaz as director of its parent company. The appointment comes at a time of maximum turmoil in the sector, in the midst of the worst energy crisis in recent decades due to the exponential rise in gas fueled by the war in Ukraine.

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The former senior official of the Government of Mariano Rajoy and former director of the FAES foundation of José María Aznar has been appointed director of the parent company of the Basque group Nature Investments SARL, domiciled in Luxembourg. According to official documentation, the appointment became effective on March 23.

elDiario.es asked Naturgas on Friday if García-Legaz had been appointed as an independent member or as a representative of any of the funds that control the company, without obtaining a response from the Euskadi-based group. García-Legaz declined to attend to this medium.

The former Murcian politician has a degree in Business Administration from the University College of Financial Studies (CUNEF) and a doctorate in Economics from the Complutense University of Madrid. Commercial technician and State economist since 1994, he was a PP deputy until 2011 and Secretary of State for Commerce between that year and 2015, when he went into the background after being splashed by the case of little Nicolás to preside over the state-owned CESCE, with one of the highest salaries in the public sector.

Between 2017 and 2018 he became executive president of Aena, in whose international subsidiary he continues to be a director. After his dismissal as chief executive of the owner of the Spanish airports, he asked to join the National Commission for Markets and Competition (CNMC), but quickly moved on to the private sector.

Currently, in addition to being a member of the Nortegas parent company, he is a director of the Ahorro Corporación securities company, of Canal de Isabel II, the public company that controls the Community of Madrid, and of the Dia chain. In the supermarket chain, he was the only director who survived the screening carried out on the group’s board in May 2019, after the arrival in his capital of the Russian oligarch Mikhail Fridman, now sanctioned by the EU for the invasion of Ukraine.

In one of his last interviews, published in The Spanish In January, García-Legaz did not make references to the serious energy crisis that was already hitting the economy, but he did refer to the “great opportunity” of European funds, which traditionally “have been absorbed very effectively by medium-sized companies and big. The small and medium must be helped, but in another way. It should not be the focus on the targeting of these funds. They must be designed to promote a more efficient economy from the energy point of view, more supported by technology to produce”.

The ancient Naturgas

With some 230 employees at the end of 2020, Nortegas, which until 2018 was called Naturgas, was acquired in July 2017 for 2,591 million euros, debt included, from Energias de Portugal (EdP) by a consortium of institutional investors led by the bank investment firm JP Morgan, a sovereign wealth fund from Abu Dhabi, the Gulf Cooperation Council, the Swiss insurer Swiss Life and the British fund Covalis Capital.

Recently, the US bank has taken control of 75%, after buying the package of that Arab fund by exercising its right of first refusal, as advanced Expansion.

In recent months, and at a time when Naturgy is preparing its spin-off into two different companies, there has been speculation about the potential future integration of Nortegas with other companies in the sector such as Madrileña de Gas, also owned by several funds that have just opened a sales process.

In the case of the firm whose parent company has signed García-Legaz, it supplies natural gas and propane gas (LPG) through a network of more than 8,000 kilometers deployed in 383 municipalities in Asturias, Cantabria and Euskadi. The group closed the first half of 2021 with 1.052 million customers, 1.3% more, of which 963,000 were domestic and commercial and 87,900 industrial.

According to the latest data from the CNMC, its share in the retail sector as of September 2021 reached 12.19%, with 971,302 supply points, slightly above Madrileña Red de Gas (11.19%) and far from Nedgia, the Naturgy distributor (67.6%).

Nortegas, which is looking for ways to diversify towards cleaner energies or processes, such as the production of hydrogen with renewables or biomethane, achieved revenues of 216 million in 2020 and a gross operating profit (EBITDA) of 174 million, slightly below 2019.

In the first half of 2021, it registered ordinary income of 112.2 million, slightly above that of 2020, a gross operating profit (ebitda) of 89 million and a net profit of 21.7 million, 20.8% less, due to higher financial expenses. His net debt was then just under 1.1 billion.

These are data prior to gas prices getting out of control, which forced the Government to put a cap on the regulated gas tariff (TUR) in September at the cost of fattening the tariff deficit (gap between revenue and regulated costs) in the gas sector.