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Purchase of natural-gas-fired power stations in Mexico

Dec. 24, 2009


Mitsui & Co., Ltd.
Tokyo Gas Co., Ltd.


Main Contents

Today, Mitsui & Co., Ltd. ("Mitsui") and Tokyo Gas Co., Ltd. ("TGC") entered into a final agreement with Gas Natural SDG, S.A. ("GN") to take control through a holding company, MT Falcon Holdings Company S.A.P.I. de C.V. (Mitsui: 70%, TGC: 30%) ("Falcon"), of a portfolio of companies holding five gas-fired combined cycle power stations in Mexico ("Power Companies"), as well as relevant companies including a pipeline company ("Pipeline Company") (together, the "Companies"). The total enterprise value of the Companies is approximately USD1.2 billion (JPY110 billion) and the acquisition will be partly funded by a project finance loan.

Mitsui and TGC will acquire approximately 76% of the total ownership interest in the Companies in early 2010 by subscribing for new shares in the Companies subject to approvals from the relevant government authorities in Mexico and fulfillment of other applicable conditions. Mitsui and TGC will acquire the remaining 24% ownership interest in the Companies either pursuant to a call option exercisable by Mitsui and TGC or a put option exercisable by GN, with both options expected to be effective in the first half of 2010.

The Power Companies hold five gas-fired combined cycle power stations located in the north east region of Mexico, with an aggregate total generating capacity of 2,233MW. The full generating capacity of the Power Companies is contracted to the Mexican national power authority, Comisión Federal de Electricidad ("CFE") under long-term (25 years) power purchase agreements.

Following the acquisition of the Companies Mitsui will hold installed generating capacity of 5,558 MW globally (including power plants under construction) and will be one of the largest independent power producers in the Mexican power market. To leverage the opportunities presented by the acquisition of the Companies to expand its power business throughout the Americas Mitsui is establishing a wholly-owned asset management company in Mexico, which will also provide operation and management services to the Companies.

Mitsui has been strategically investing in power and other infrastructure projects in Mexico in recent years, including a 50% interest in a 525MW gas-fired combined cycle power plant in Valladolid, significant equity interests in LNG receiving and regasification terminals, and a majority interest in a major player in the water and wastewater treatment businesses. Mitsui continues to pursue further opportunities to expand its business platform in Mexico.

The acquisition of the Companies is consistent with TGC's medium-term strategy for the period 2009-2013 to make significant investment in upstream and downstream assets located overseas. TGC has allocated approximately JPY 15 billion for investments during this period.

This is the second overseas power asset investment for TGC after the existing Mexican power business (Bajio Project). TGC plans to continue developing its overseas business related to the LNG value chain, including by acquiring interests in upstream projects.

Notice:
This press release includes forward-looking statements about Mitsui. These forward-looking statements are based on the current assumptions and beliefs of Mitsui in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. This press release is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Investor Relations Division
TEL:03-3285-7910
FAX:03-3285-9819
infoTKADZ@mitsui.com
Tokyo Gas Co., Ltd.
Corporate Communications Department
Mr. Kiyotaka Matsui
TEL:03-5400-7675
FAX:03-3437-9130
Mitsui & Co., Ltd.
Corporate Communications Division
Ms. Mikako Sachigai
TEL:03-3285-7596
FAX:03-3285-9819