(News Bulletin 247) – The energy group has set up a forward sales mechanism with banks which will lead it to sell its residual stake of 5.38% in GTT on the basis of a price of 137 euros per share. For the specialist in cryogenic membranes used for the transport of liquefied natural gas, this marks the end of a long period of uncertainty.

Without making big waves on the GTT share, Engie is setting in stone its exit from the capital of the group whose full name is Gaztransport and Technigaz.

The energy group announced Wednesday evening that it had concluded a forward sale mechanism with the banks Natixis and Morgan Stanley concerning the balance of its 5.38% stake in the capital of GTT.

This process will allow Engie to sell this share not today but in 18 months, i.e. in September 2025. This transfer will take place at a determined price, based on that of an investment that the banks have even made to cover their commitments within the framework of this forward sale mechanism.

Morgan Stanley and Natixis have, in fact, placed 1.994 million GTT shares as part of this placement with qualified investors. To carry out this investment, the banks borrowed the securities from Engie, which will therefore remain the owner of GTT shares until September 2025.

The banks’ placement resulted in a price per share of 137 euros, which reflects a discount of 3.9% compared to Wednesday’s closing price.

>> Access our exclusive graphic analyses, and gain insight into the Trading Portfolio

The end of a long process

Certainly, following these announcements, GTT shares logically find themselves under pressure on the Paris Stock Exchange. The stock lost 3.6% around 11:30 a.m., the stock getting closer to the investment discount. This happens regularly and almost automatically when investors sell large blocks of shares of a listed group as part of a private placement.

But, ultimately, this transaction definitively erases a sword of Damocles for GTT stock. “This operation completes Engie’s exit from GTT’s capital, which began in May 2021,” underlines Nicolas Royot de Portzamparc, who reiterated his advice to buy with a price target of 148 euros.

Engie’s entry into the capital dates back to 1986: at the time Gaz de France (the former name of Engie before 2015) had taken a majority stake of 51%, before reducing it to 40% in 1994.

More than 25 years later, the group decided, in November 2020, that this 40.4% stake was no longer strategic, opening the way to a gradual exit of capital. Engie has therefore carried out several transactions with this in mind.

The former GDF sold 10% of the capital in May 2021, then issued in the same month bonds exchangeable into GTT ordinary shares (10% of the capital) which were fully repaid in GTT securities. In March 2022, Engie then sold 9% of the cryogenic membrane specialist before selling 6% again in September 2022.

Sharply increasing results

This process of disengagement within capital is therefore completed. As the sale price of the shares of the balance of Engie’s participation is known in advance via the mechanism, GTT shares will no longer suffer.

“The announcement (of the sale of the balance of Engie’s stake) now removes significant uncertainty on the title. We knew that this was going to fall, it is now confirmed. In addition the discount conceded, of less than 4% , is far from catastrophic given GTT’s stock market performance”, deciphers a financial intermediary.

GTT shares have gained more than 15% since the start of the year and more than 40% over one year, significantly outperforming its benchmark index, the SBF 120 (+7.8% in 2024, +15.07 % over one year).

The company has recently released impressive results and outlook. Turnover increased by 39% in 2023, gross operating profit (Ebitda) by 45.6% while its proposed dividend for 2023 was increased by 40.6%.

And, for 2024, the company expects a turnover of between 600 million and 640 million euros and an EBITDA of between 345 million and 348 million euros. Which amounts to anticipating an increase of 40% to 50% in its revenues and of 46% to 48% in its Ebitda. The stock gained nearly 9% following the publication of these results.

The group’s results are driven by a well-stocked order book (296 LNG carriers at the end of December, for example) itself supported by the strong demand for liquefied natural gas (LNG), seen as a transitional energy in certain countries. country, and which could also constitute an alternative to Russian gas for countries wishing to respect embargoes.

“The demand for LNG remains particularly strong and sustainable, as illustrated by the number of final investment decisions for new liquefaction plants taken at the start of the year and involving very large volumes. The continuation of strong demand of LNG and the construction of new liquefaction plants will continue to generate additional needs for LNG carriers”, explained in February the CEO of GTT, Philippe Berterottière, on the occasion of the publication of the group’s results.

“The LNG tanker replacement market, with the need to comply with environmental standards, is also taking off and supporting the group’s demand,” adds the financial intermediary previously cited.