By Clara Denina , Andrés González and Sergio Goncalves
LONDON/LISBON (Reuters) - EDP-Energia de Portugal is working on a plan to sell some of its electricity generation assets in Portugal, three sources close to the matter said, in an effort to free up cash to drive its renewable energy expansion.
The plan is expected to be unveiled at an investors meeting in London on March 12, one of the sources said.
EDP, which was approached last year by China Three Gorges (CTG) with a 9 billion euro takeover proposal, owns conventional generation assets in Portugal and Spain that are worth around 1.7 billion euros ($1.9 billion).
It is currently looking to divest part of its operations in Portugal, which all together account for 90 percent of electricity generation and distribution in the country.
The move comes after activist investor Elliott launched a campaign to try to thwart CTG's takeover proposal, which EDP has described as too low.
The sale of the Portuguese assets also reflects some of Elliott's demands, one of the sources said.
Elliott has built a 2.9 percent stake in EDP, becoming one of the utility's top ten shareholders.
It wants EDP's investors to shun CTG, the largest shareholder in EDP with a 23 percent stake, and back an alternative plan to divest assets across Brazil, Portugal and Spain which could be worth about 7.6 billion euros.
EDP, led by Chief Executive Officer António Mexia, will meet the company's investors at the Berkeley Hotel in London's upmarket Knightsbridge district on March 12, the sources said, and will outline a new strategy to raise cash from asset sales to finance renewable energy projects.
The company has also started a parallel sale process for its thermoeletric plant Pecem in the Brazilian state of Ceara, which could be valued at around $520 million, a third source said.
Meanwhile, CTG's bid proposal needs regulatory approval in a number of countries, including Brazil, the United States, Portugal and the European Union.
Reuters reported on Jan. 25 that CTG had halted talks with EU regulators about the proposed takeover.
European utilities have been forced to change business models by an increasing shift to renewable energy sources.
EDP owns wind energy subsidiary EDPR, which manages operating assets in 11 countries and is also the target of CTG's takeover plan.
(Additional reporting by Tatiana Bautzer in Sao Paulo; Editing by Pamela Barbaglia and Mark Potter)